Beijing has remained defiant in the face of a bitter trade war with the U.S. that saw tariffs skyrocket above 100% on both sides as the Trump administration hints at looming discussions that China has vehemently denied are happening.

After an aggressive start from Washington to a trade war with the world’s second-largest economy, President Donald Trump and Treasury Secretary Scott Bessent have suggested the triple-digit tariffs on Chinese goods could come down and that talks are underway.

Tariffs on China currently sit at 145%, higher than any other country in Trump’s expansive attempt to remake global trade. It was met with a 125% levy on American goods in a trade war that threatens to put trade between the world’s two biggest economies into a standstill and has raised fears of a global recession.

The International Monetary Fund has cut growth forecasts for the U.S., China and a host of other countries because of the trade war. Analysts and business executives have also warned of potential shortages of some goods if things don’t start moving in a more positive direction.

Companies that have developed global and interconnected supply chains are also in a holding pattern with tremendous uncertainty about what the future will hold and how tariff policy could change.

Trump declined to comment on Friday when reporters asked him when the last time he spoke to Chinese President Xi Jinping.

Earlier in the week, the president said that things were going “fine with China” and the final tariff rate would come down “substantially.”

But China has denied those conversations are happening at every turn and continued vows to fight as long as necessary in a refusal to give into pressure from the White House. The Trump administration has accused the country of ripping off American companies and violating trade agreements.

“China and the U.S. have not engaged in any consultations or negotiations regarding tariffs, let alone reached an agreement,” a Chinese foreign ministry spokesperson said on Thursday.

After a trade war during the first Trump administration, China had been preparing for another in a second term and has not moved to rush into negotiations after being hit with tariffs.

“It’s been more like smoke signals back and forth between the two sides. My sense is they would like to find some common ground, and I suspect they will, but I suspect that common ground will result in a level of tariffs and other policies that are higher than what we saw at the beginning of the Trump administration, but lower than what we see now,” said Robert Koopman, former chief economist at the World Trade Organization and Hurst senior professional lecturer at American University.

China is also trying to insulate itself from trade deals between the U.S. and other countries working against its interests.

Beijing put out warnings this past week saying it would retaliate if countries agreed to trade deals with the U.S. that hurt China.

Several outlets reported Friday that China quietly moved to exempt some semiconductors made in the U.S. from tariffs to insulate itself from effects of the trade war in areas it is reliant on American goods. Some analysts also saw the move as a gesture indicating Beijing is willing to negotiate with Trump, though both sides have struggled to come to an agreement over what that looks like.

Beijing has also continued to fight back against the tariffs by making other moves like canceling orders of Boeing jets, pausing shipments of some exports to U.S. buyers and cutting back on purchases of American soybeans. It has also said talks should involve canceling the tariffs it is facing.

“The whole problem here is that the Trump administration has misread the centrality of the U.S. and global trade,” Koopman said. “The U.S. is a big importer and a big exporter, but global trade is much bigger than just these U.S. bilateral relationships, and China in particular.”

Trump has said his aggressive tariff agenda will bring more manufacturing jobs back to the U.S.

He said it will also bolster national security by allowing the U.S. to stop relying on China for an assortment of goods. Economists, though, have warned such a revitalization of America’s manufacturing sector might not be practical and could take years to develop.

“This is a tremendous success,” Trump said. “You just don’t know it yet.”

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