China Warns Trump To Avoid Crossing Four “Red Lines” Or Risk Trade Truce Collapse

Ever since the recent “truce” in the trade war between the US and China was signed in Korea one week ago – the latest of many such ceasefires meant to be broken - skeptics have been patiently counting down until this latest ceasefire is torn up, and tensions between the two superpowers flare up once more. 

Overnight China made it likely that they won’t have long to count: as Bloomberg reports, Beijing warned the US to avoid four sensitive issues, so-called red lines, so a trade truce sealed between Trump and Xi can hold, highlighting the broad array of disagreements that will test ties. Of course, the one thing that is certain to prompt Trump to cross any and all red lines is knowing he should not do it… which is precisely why China is doing what it is doing. 

Ambassador to the US Xie Feng named i) Taiwan, ii) democracy and human rights, iii) China’s political system, and iv) development rights as Beijing’s four red lines, adding that “the most important thing is to respect each other’s core interests and major concerns.” 

Xie made the remarks in a virtual speech to a US-China Business Council event, according to a statement from the Chinese embassy on Tuesday. He added that “the pressing priority is to follow up on the consensus reached between” Xi, Trump and their officials, “to reassure both our countries and the world economy with concrete actions and outcomes.”

Whether it comes to conflicts over tariffs, industry or technology, Xie warned that “all will lead to nothing but a dead end” not like any of that stopped Trump before, which is also why the countdown until the next “100%+ tariff has officially begun.”

The comments, Bloomberg explains to the front of the bus, offer a reminder of the many ways that the one-year truce reached on Thursday in South Korea can come undone. It also shows that while Taiwan’s status didn’t come up in talks between Xi and Trump, it’s still very important to Beijing.

And underscoring just how tenuous the current ceasefire truly is, is the fact that both sides are actively doing everything in their power to sabotage it. As Rabobank’s Michael Every writes this morning, “all serious views of the recent ‘US-China deal are this is just a metaphorical ceasefire to (literally) rearm, not any ‘peace’, and it is when not if we get further escalation.

Supporting that view from one side, he writes that the White House just struck a $1.4bn deal with rare-earth magnet startups Vulcan Elements and ReElement Technologies. From the other, besides China introducing new export controls on silver, antimony, and tungsten, Nexperia’s China plant has told local firms that it can meet chip orders despite suspended supply from European fabs previously in the same group.

In short, it’s now just a matter of time before we get another raging post on the president’s Truth Social account, taking us back to square one.