Trade War Timeout: Xi and Trump Head to the Corner
What has President Trump said this week?
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What has President Trump said this week? 〰️
1. 90-Day Tariff Truce
On May 12, 2025, President Donald Trump announced a major turning point in U.S.-China trade relations: a 90-day agreement to reduce tariffs. Under this deal, U.S. tariffs on Chinese goods will drop from 145% to 30%, while China will lower its tariffs on U.S. products from 125% to 10% (CNN, 2025). The White House has described the agreement as a "historic trade win," highlighting its potential to expand American access to Chinese markets (The White House, 2025).
This temporary tariff reduction is intended to ease mounting economic tensions, as both countries have faced GDP contractions this year. It also serves as a window for further negotiations, with many underlying trade disputes still unresolved. The announcement had immediate economic impact, with U.S. stock markets reacting positively (AlphaInsights, 2025). However, analysts warn that the relief may be short-lived unless substantial progress is achieved during the 90-day period.
While the tariff cuts offer short-term benefits to businesses and consumers, deeper challenges remain—particularly around intellectual property rights, technology transfers, and the flow of fentanyl. President Trump is expected to meet with Chinese President Xi later this week to continue negotiations.
2. Targeting Big Pharma
On Monday, President Donald Trump signed an executive order aimed at reducing high prescription drug costs by implementing a “Most Favored Nation” pricing policy. This policy seeks to align U.S. drug prices with the lowest prices paid by other countries, especially those with single-payer healthcare systems. The order directs the Secretary of Health and Human Services to negotiate price reductions with pharmaceutical companies within 30 days. If meaningful progress is not made within 180 days, the administration may pursue further regulatory actions, including potential import restrictions.
“We’re going to finally take on the greed of the pharmaceutical industry,” Trump stated, calling the move an effort to “stop letting other countries freeload off the backs of American patients and taxpayers” (AP, 2025). Trump criticized current disparities, arguing that Americans are unfairly subsidizing lower prices abroad: “That’s not right. That’s not fair.”
While the executive order has gained significant support, it faces strong opposition from the pharmaceutical industry, which argues the policy could affect innovation and limit access to certain medicines. A 2024 RAND Corporation study shows that US medicine prices are, on average, 2.78 times higher than 33 comparable developed countries.
3. Negotiating Russia-Ukraine Peace, Again
Diplomatic efforts to restart peace negotiations between Russia and Ukraine have intensified, with a proposed summit in Istanbul garnering global attention. President Trump has expressed interest in attending the talks, stating that Russian President Putin “would like me to be there, and that’s a possibility… I don’t know that he would be there if I’m not there. We’re going to find out” (Reuters, 2025).
Ukrainian President Volodymyr Zelensky has called for direct, face-to-face talks with Putin, stressing the importance of personal dialogue. However, President Trump’s potential involvement introduces a complex dynamic, with analysts suggesting his presence could significantly influence the talks’ outcome. European leaders have also expressed concern over the US' approach, fearing that his unilateral actions may undermine coordinated European efforts to pressure Russia into meaningful concessions. The upcoming diplomatic engagements will play a crucial role in shaping the future of the conflict, with major implications not only for Ukraine but also for broader Europe-US relations (The Guardian, 2025).