US President Donald Trump’s decision to visit China in April, following what he called a “very good” phone conversation with President Xi Jinping on Monday, has injected cautious optimism into efforts to stabilise a relationship long strained by tariffs, export controls and strategic rivalry. Analysts say the talks could help determine whether the fragile truce reached last month can evolve into meaningful tariff relief—or slip back into confrontation.
For India, the renewed diplomatic warmth between the US and China could have mixed implications in terms of global trade. If Washington and Beijing move towards easing tariffs or stabilising supply chains, global manufacturing costs may fall, potentially reducing the incentive for firms to shift operations to India purely for diversification.
A de-escalation in the tariff war could also lessen India’s opportunity to capture incremental export orders in sectors such as electronics, machinery and chemicals, where it has benefited from trade diversion over the past few years. At the same time, a calmer US-China trade environment could bring more predictability to global commodity prices—especially metals and energy—helping Indian manufacturers manage costs better.
However, India could also face fresh competitive pressure. A reduction in US tariffs on Chinese goods might restore some of China’s lost market share in the US, making it harder for Indian exporters—particularly in labour-intensive sectors like textiles, leather goods and engineering products—to maintain recent gains. On the other hand, improved US-China agricultural trade, particularly in soybeans and other farm products, may redirect global supply flows and affect India’s agri-export prices.
Much will depend on whether the thaw translates into a broader restructuring of trade rules or remains a narrow, transactional truce; for India, the challenge will be to safeguard the advantages gained during the tariff conflict while accelerating domestic reforms to stay competitive in a more stable global trading environment.
The two leaders discussed Taiwan, Ukraine, soybeans and wider trade issues during Monday’s call, which came weeks after their first in-person meeting in October in South Korea. That summit produced a one-year freeze on new tariffs and export control measures, giving both sides breathing space after years of tit-for-tat escalation.
Beijing has since portrayed relations as moving in a “steady and positive direction.” Trump, for his part, touted progress on farm trade, saying a new deal would “only get better” for US producers. His comments suggest he may be open to negotiating reductions in Chinese retaliatory tariffs that have hit American agriculture particularly hard.
For China, Trump’s April visit offers an opportunity to lock in stability at a time when it is managing multiple diplomatic fires—including an escalating dispute with Japan over Taiwan. While Beijing remains firm on its “red line” regarding the island, it is signalling that it does not want tensions to spill over into its crucial trade relationship with the US.
Analysts believe this geopolitical backdrop adds urgency to the tariff question. Beijing may seek to reassure Trump on sensitive issues to ensure he remains focused on economics, where China hopes for concessions. China is wary of making concessions unless it is confident Trump will not abruptly reverse course.
Even so, Trump’s planned trip—the first by a US president to China in years—marks the most concrete sign in some time that both sides may be willing to revisit the tariff war that has weighed heavily on supply chains, corporate investment and global trade sentiment.
