Trade War

Newsletter 290 - Feb. 1, 2026

Welcome to the 290th edition of Trade War.

UK Prime Minister Keir Starmer has finished a four-day trip to China, where he met Xi Jinping in Beijing and heralded a “more sophisticated” bilateral relationship. Beijing agreed to cut tariffs on whiskey from 10 to 5 percent, allow visa-free travel to British citizens to China, and lifted sanctions on some officials. And Trump has warned UK and Canada against tighter business ties with China even as he continues to push for deals with Beijing and prepares to visit China in April.

Ford Motor’s plan to expand its relationship with a Chinese battery maker has been criticized by the Select Committee on China. And worries grow that content critical of Trump has been censored, at new US TikTok subsidiary.

Activity in Chinese factories slows unexpectedly in January. And as births crater in China will officials get more punitive with pro-natal policies?

Notable/In depth ~

• China energy-building boom aims to meet surging demand from emerging industries

• Former Trump official David Feith discusses US president’s shift to a softer stance on China

• China is dominating new world of intelligent robots and drones, or “embodied AI”

Trump warns UK & Canada on China biz ties

Trump has warned the leaders of the UK and Canada against tighter business ties with China even as he pushes for Chinese deals and prepares to visit Beijing.

Speaking after UK Prime Minister Sir Keir Starmer met Xi Jinping in Beijing, Trump warned Thursday that too close ties with China are “very dangerous,” adding that for Canada, “it’s even more dangerous.”

Starmer described his talks with Xi as “very warm,” saying his country is seeking a “more sophisticated” relationship with China.

“I don’t think it’s wise for the United Kingdom to stick its head in the sand. China is the second-biggest economy in the world. It’s, along with Hong Kong, our third-biggest trading partner,” Starmer said to Sky News.

During the prime minister’s four-day visit that ended Saturday, the UK and China signed deals to halve tariffs on whiskey from 10 to 5 percent and start visa-free travel to China for UK citizens, while British-Swedish pharmaceutical giant AstraZeneca announced a $15 billion investment. Chinese sanctions on some UK officials were also lifted on Friday.

Trump also singled out Canada for criticism. Ottawa’s recent decision to slash tariffs on Chinese electric vehicles in exchange for Beijing’s easing of restrictions on Canadian canola imports, following Prime Minister Mark Carney’s January visit to China, has outraged the White House, eliciting more Trump tariff threats.

“Canada is not doing well. They’re doing very poorly, and you can’t look at China as the answer,” Trump said to reporters, adding “I know China very well. I know President Xi is a friend of mine.”

“Having a hard time understanding President Trump’s lashing out”

“I’m having a hard time understanding President Trump’s lashing out on recent visits by PMs Carney and Starmer to China. He threatened 100 percent tariffs against Ottawa if it entered into a trade deal with Beijing, and overnight called UK business deals announced during the Starmer trip as “dangerous,’” writes Wendy Cutler, Senior Vice President at the Asia Society Policy Institute, and a former U.S. trade official.

“To be clear, both Prime Ministers seemed to get little from Beijing—some minimal tariff reduction, visa access for the UK and some business and light cooperation. deals. The UK and China agreed to launch a feasibility study on closer trade ties but no certainty if this will lead to anything substantial.”

“But in light of the recent U.S. tariff truce with China where both sides reduced tariffs, the sale of Nvidia H200 chips to China, and preparations for more trade and business announcements during Trump’s April visit to China, it’s curious that Trump would criticize our long-term allies for doing the same.”