US President Donald Trump Accuses China of Violating Tariff Truce, Markets Slide

US President Donald Trump on Friday accused China of breaking the trade agreement both countries signed just weeks ago, threatening to unravel a fragile truce and reigniting tensions in the ongoing U.S.-China trade war.

The comments came as signs of trouble had already begun to surface in recent days. On May 12, the U.S. and China agreed to a 90-day pause on escalating tariffs after negotiations in Switzerland. Under that deal, U.S. tariffs on Chinese imports were slashed from a punishing 145% to 30%, giving both sides breathing room to continue talks.

But according to President Trump, China hasn’t lived up to its side of the deal.

“Because of this deal, everything quickly stabilized and China got back to business as usual. Everybody was happy! That is the good news!!!” Trump wrote on Truth Social. "The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!”

Trade Talks Stalled Again

Trump’s outburst came after Treasury Secretary Scott Bessent hinted Thursday night that negotiations were faltering. “A bit stalled,” was how he described the talks, suggesting that the détente may be slipping.

Although the details of China’s alleged violations have not yet been publicly clarified, the strong language from Trump marks a sudden escalation that could undo weeks of progress.

Markets React Swiftly

Trump’s announcement sent shockwaves through financial markets. S&P 500 futures, which had been stable earlier in the morning, dropped by 0.5% shortly after the president’s post.

The broader market had been on an upswing since the tariff pause was announced, with the S&P 500 gaining nearly 5% amid optimism that a larger trade deal might follow. That optimism may now be fading.

What’s Next?

It remains uncertain what steps the Trump administration will take in response. The current tariff pause is officially set to continue until August 12, but Trump’s post suggests a possible reversal — or even retaliation — could be on the table.

With no immediate resolution in sight, analysts warn the situation could escalate again if both sides fail to return to meaningful negotiations soon.