Supreme Court Tariff Decision Complicates US-China Trade Ahead of Trump Beijing Visit

A Supreme Court ruling overturning President Trump's tariffs has created fresh complications in US-China trade relations just weeks before Trump's planned March visit to Beijing. While the decision appears to benefit China's negotiating position, experts say both nations remain cautious about escalating tensions.

WASHINGTON — A recent Supreme Court decision overturning President Donald Trump’s extensive tariff program has injected fresh complexity into US-China trade dynamics, as both nations work to prevent a full-scale economic conflict that could destabilize global markets while positioning themselves advantageously for upcoming negotiations.

While Friday’s judicial decision appears to give China leverage, experts believe Beijing will exercise restraint in capitalizing on this development, recognizing Trump retains alternative methods for imposing trade penalties. Both nations seek to preserve their delicate trade agreement and establish stability before Trump’s scheduled visit to Beijing.

“It will give China a moral boost in their negotiations with Trump’s team ahead of the summit, but they are prepared for the scenario that nothing actually changes in reality,” said Sun Yun, director of the China program at the Stimson Center, a Washington-based think tank.

Responding angrily to the setback, Trump announced plans for a temporary 10% worldwide tariff that would increase to 15%, while exploring other avenues for import taxes. He justified these measures by citing China’s challenge to American economic, technological and military supremacy.

“China had hundreds of billions of dollars in surpluses with the United States. They rebuilt China. They rebuilt the army. We built China’s army by allowing that to happen,” Trump told reporters Friday. “I have a great relationship with President Xi, but he respects our country now.”

The White House has announced Trump’s China visit will occur March 31 through April 2 for meetings with President Xi Jinping.

Xi will likely avoid aggressively leveraging the Supreme Court decision during Trump’s visit, instead focusing on building personal connections with the American president, according to Ali Wyne, a senior research and advocacy adviser on US-China policy at the International Crisis Group.

The stronger Xi’s relationship with Trump becomes, “the more likely it is that the fragile trade truce between the United States and China will take hold in earnest and that Trump will be amenable to security concessions that give China greater freedom of maneuver in Asia,” Wyne said.

When asked about the court ruling’s impact, Chinese Embassy spokesperson Liu Pengyu simply stated that tariffs and trade conflicts benefit neither nation. He urged Beijing and Washington to collaborate in “provide greater certainty and stability for China-U.S. economic and trade cooperation and the global economy.”

The judicial ruling has also generated uncertainty among other American trading partners across Asia and beyond, particularly those who negotiated agreements to address initial disruptions from Trump’s tariff policies.

“I would expect most Asian partners to proceed cautiously, with existing agreements largely holding as both sides work through the implications in the coming weeks,” said Dan Kritenbrink, a partner at The Asia Group who served as assistant secretary of state for East Asian and Pacific affairs in the Biden administration.

Kritenbrink noted he’ll monitor effects on Japan before Prime Minister Sanae Takaichi’s March Washington visit. Japan, a key US ally, has experienced worsening relations with Beijing recently.

Following Trump’s return to office last year, he utilized emergency powers legislation to implement 20% tariffs on Chinese products, citing Beijing’s inadequate efforts to control chemical exports used in fentanyl production.

Trump subsequently used identical emergency authority for broad reciprocal tariffs against numerous nations, including 34% on China. Beijing responded in kind, causing tariffs to temporarily reach triple-digit levels before both sides de-escalated.

Following multiple negotiation rounds and a Trump-Xi summit in South Korea last October, both countries established a one-year truce with 10% baseline tariffs. Trump reduced the fentanyl-related tariff to 10%, while Beijing renewed cooperation in limiting exports of substances used for opioid manufacturing.

Wendy Cutler, vice president of the Asia Society Policy Institute, suggested the Trump administration might quickly implement an alternative strategy. The Office of the US Trade Representative maintains an ongoing investigation into China’s adherence to previous trade agreements, potentially serving as the administration’s contingency plan, she explained. Trade law permits tariff implementation if China fails to meet agreement obligations.

Rep. Ro Khanna, the leading Democrat on the House Select Committee on the Chinese Communist Party, called for the administration to develop a stronger approach that “holds China accountable for its unfair trade practices and leverages the collective power of our allies and partners.”

Gabriel Wildau, a managing director specializing in China political risk analysis at consultancy Teneo, observed that Trump has demonstrated readiness to employ alternative legal mechanisms for Chinese tariffs, as during his previous presidency. Beijing likely expects these tariffs could be sustained or recreated “with only modest difficulty.”

“But Beijing also holds out hope that they can persuade Trump to lower this tariff in exchange for purchase guarantees or other concessions,” Wildau said.