China accuses US of violating trade deal, warns of retaliation
China has accused the United States of significantly breaking a recent trade agreement, threatening severe repercussions. According to the Ministry of Commerce, Washington undermined the Geneva agreement made in May, in which both countries promised to reduce tariffs — the US from 145 percent to 30 percent and China from 125 percent to 10 percent, Associated Press reported.
Beijing also blamed a breakdown in consensus during a January phone chat between Chinese President Xi Jinping and US President Donald Trump. It denounced previous US steps such as restricting chip design software, prohibiting the use of Huawei chips, and canceling student visas.
Meanwhile, President Trump accused China of violating the agreement. US Trade Representative Jamieson Greer claimed Beijing failed to remove non-tariff barriers as promised, according to Associated Press.
US debt downgrade drives up borrowing costs
The yield on US government long-term debt surpassed 5 percent on Monday, marking its highest level since October 2023, before easing slightly. This increase comes in the wake of Moody’s recent downgrade of the US sovereign credit rating, citing the substantial growth in federal debt over the past decade, according to BBC.
At the same time, Congress is advancing tax and spending legislation expected to increase the national debt beyond the current $36trn, highlighting persistent concerns over fiscal stability.
India, Japan warn of tariffs on US goods in WTO dispute
India and Japan have notified the WTO of plans to impose retaliatory tariffs on US imports in response to increased steel and aluminum duties imposed by the Trump administration.
Both countries argue the US tariffs, in place since 2018 and expanded in March 2025, qualify as safeguard measures under WTO rules, entitling them to suspend equivalent trade concessions, Xinhua reported.
India claims that the tariffs affect $7.6bn of its exports and will equal $1.91bn in taxes with equivalent tariffs on US imports. Japan intends to take similar action, targeting US limits on auto imports.
The EU and UK have already filed comparable WTO notifications, according to Xinhua.
China’s economy hit by trade war, weak demand
China's factory-gate prices fell 2.7 percent in April, the steepest drop in six months, while consumer prices fell for the third consecutive month, underscoring mounting deflation risks.
The economic downturn is being driven by low domestic demand, a prolonged housing collapse, and escalating trade tensions with the United States, according to Reuters.
In response, Beijing has announced more stimulus measures, like as rate reduction and liquidity increases. Retail giants such as JD.com and Alibaba's Freshippo are assisting exporters in shifting to the domestic market, however low consumer confidence may keep prices under pressure.
As trade talks start in Switzerland, global banks have downgraded China's GDP forecast to below the official 5 percent target, citing the impact of ongoing economic headwinds, Reuters reported.
