Any trade deal between the United States and China will do little more than pause the bleeding.

That’s the take from Charlene Barshefsky, former U.S. Trade Representative under Bill Clinton, who told the Bund Summit in Shanghai on Saturday that a temporary fix is all the world should expect right now.

“A US-China deal, whatever it is,” she said, “will be at best setting a tactical floor for the moment.” She added bluntly, “Strategically, it will not impact, I don’t believe, either the direction that China is going in or the direction the US is going in.”

Barshefsky, who led China’s entry into the World Trade Organization over two decades ago, said she no longer sees a united global trading system.

Instead, she expects the world to divide into three major economic blocs: the U.S. and its allies, China alongside the Global South, Russia, and possibly the Middle East, and a third cluster of non-aligned economies like India. The fragmentation, she warned, won’t be undone by any handshake deal between Washington and Beijing.

Officials hold new talks but deepen mistrust

Talks resumed Saturday in Kuala Lumpur, where top U.S. and Chinese economic officials began another round of negotiations.

A U.S. Treasury spokesperson allegedly described the discussions as “very constructive.” But behind that diplomat-speak is real anxiety: both sides are desperate to avoid a repeat of the tariff war that once pushed duties above 100% on some goods.

A planned meeting between President Donald Trump and President Xi Jinping next week is driving urgency. But the tone of the talks remains fragile.

Back in May, Bessent and Greer met with He in Geneva to set up a 90-day tariff truce, lowering duties to about 55% on U.S. goods and 30% on Chinese exports, which also allowed magnet trade to resume.

That pause was extended in London and Stockholm, but it’s now running out; the clock hits zero on November 10.

Things got worse at the end of September. That’s when the U.S. Commerce Department added a massive batch of Chinese firms to its export blacklist, targeting any company over 50% owned by blacklisted entities. This new rule instantly cut off U.S. exports to thousands of Chinese companies.

China hits back with rare earth curbs and defends its position

China retaliated on October 10 by tightening its rare earth export controls, aiming to stop their use in foreign military systems. That response triggered harsh reactions from U.S. negotiators. Bessent and Greer called it a “global supply chain power grab” and promised the U.S. and its allies would fight back.

Now, Reuters reports that the Trump administration may hit back with restrictions on a massive list of software-driven U.S. exports to China, including laptops, smartphones, and even jet engines.

On top of that, Washington just opened a new tariff probe into China’s failure to meet its obligations under the 2020 “Phase One” trade deal that paused the original trade war during Trump’s first term.

The tensions were also visible at the Bund Summit, where multiple speakers took swipes at both sides. Some demanded that China scale back its export-driven economy to reduce its ballooning trade surplus.

One of them, Yu Yongding, a former adviser to China’s central bank, pushed back hard. He said the U.S. should “take responsibility” for failing to spread globalization’s gains across its own population, instead of blaming China.

Yu also argued that China has been shifting its growth model toward domestic demand, and he stood firm on the rare earth restrictions, calling them a direct answer to U.S. sanctions.

When asked whether the move could damage Europe, Yu said it wasn’t aimed at them and suggested there could be a technical fix to minimize any collateral damage.

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