US president Trump prepares a brand new trade deal with China

President Donald Trump has launched an aggressive push for a brand-new trade deal with China, aiming to rewrite the economic relationship between the world’s two largest economies. According to a report from the New York Times, Trump wants major Chinese commitments, including increased purchases of American products and a fresh round of investment deals—all while keeping tariffs as leverage.

Trump’s return to power has reignited a battle he started during his first term. According to the Times, Trump believes the 2020 trade agreement with China was sabotaged—not by Beijing, but by “stupid people” in Washington who failed to enforce the deal.

Trump targets China with new tariffs and trade demands

On February 1, Trump fired a 10% tariff on all Chinese imports, which immediately triggered a retaliatory response from Beijing, escalating tensions between the two economic powerhouses. Administration insiders say the tariff was just an “opening salvo”—a calculated play to force China to the table.

Treasury Secretary Scott Bessent has already been tasked with reviewing China’s compliance with the 2020 trade agreement, which Trump insists was never honored. Beijing had promised to buy an additional $200 billion in US goods and services, but those purchases never materialized. “Catch-up” purchases are now on the table, with Scott saying last week that China will have to pay up or face consequences.

Commerce Secretary Howard Lutnick, one of Trump’s top business allies, has been encouraging negotiations, suggesting that a well-structured agreement could help stabilize economic relations. However, sources close to the White House say the administration hasn’t settled on its full list of demands yet.

China’s economic weakness could give Trump the upper hand

China’s economic struggles could make it more willing to negotiate. The country’s property market collapse and slowing growth have forced Beijing to rely more heavily on exports, flooding international markets with cheap electric vehicles, solar panels, and manufactured goods. US officials argue this strategy has crippled domestic manufacturing in other countries, making it a key issue in the negotiations.

“Even if you wanted to start a negotiation with China, it’s going to be very difficult,” said Wendy Cutler, a former US trade negotiator. The White House knows this, which is why Trump is using tariffs, potential export bans, and the threat of trade status revocation to pressure China into making bigger concessions.

According to the NYT report, Chinese companies are willing to invest in US industries such as solar, electric vehicles, and batteries, potentially creating up to 500,000 jobs. Beijing is reportedly considering taking minority stakes in joint ventures or licensing its technology to American firms.

Beijing’s strategy: Wait and watch

Inside China, government officials are cautious but not panicked. According to the report, they recognize Trump’s unpredictability but also see opportunities in his need to deliver economic wins before the 2026 midterms.

A Feb. 13 policy paper from Chinese analysts said Beijing is closely studying Trump’s “dual character”, recognizing his erratic yet transactional approach to power.

But the paper also suggests that if China understands Trump’s fundamental political goals, it can exploit his need for economic wins and extract favorable trade terms.

Unofficial back channels between Washington and Beijing have already opened, with Chinese officials trying to assess Elon Musk’s role in Trump’s administration. The billionaire, who has major business interests in China through Tesla, met with China’s Vice President Han Zheng in January.

The NYT report says that Elon has expressed confidence that a trade deal can be reached and has been encouraging Trump to find common ground.

Trump himself seems to see the situation as a personal challenge. Unlike other officials who view China through an ideological lens, Trump treats Xi Jinping as a business rival rather than an adversary. His Feb 15 Truth Social post made that clear: “It is my expectation that we will solve many problems together, and starting immediately.”

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