CNBC’s The China Connection newsletter: Tariffs eased. Trust didn’t.
Hello, I’m Evelyn, writing to you from Beijing. Welcome to the latest edition of The China Connection, a concise summary of what I’m seeing and hearing from local businesses.
Now that the Trump-Xi summit has helped keep tariffs in check, Chinese companies and U.S. representatives are making the most of an extended ceasefire to keep some deals going. But is this enough to overcome data security and branding hurdles?
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Zou Ping, co-founder of AI Speech, says ‘the worst is over’ for businesses navigating US-China tensions, He told me this in Suzhou last week.
It was just days after he returned from the United States, one of the company’s key growth markets, driving sales of its high-end microphones, speakers and digital note-taking tablets.
The company’s speakers and microphones use on-device AI capabilities to improve audio quality and are widely used in corporate meeting rooms and college classrooms, he said.
The timing couldn’t have been better.
Earlier this month, the US and China reached an agreement to this effect.“Constructive strategic stabilization” signals a broader effort to stabilize relations after more than a year of rising tensions and tariff increases that at one point pushed cumulative taxes above 100 percent.
Now, the extended ceasefire suggests those taxes could remain at about the same level. half of these levels for longer.
Tariffs and market access remain top concerns for Zou. But he is hopeful that U.S.-China relations will not deteriorate further, at least for the next three to five years.
The biggest challenge in winning over U.S. customers is branding, he said.
AI Speech said it was exploring acquisitions and local hires as part of its U.S. expansion strategy and pointed to talks with New York electronics retailer B&H.
This theme echoed my conversations with other executives: recent trips to the US and Europe, meetings with major American retailers, and renewed plans for overseas expansion.
“We are talking Best Buy Guo Renjie, CEO of humanoid robot startup Zeroth, told me in Suzhou last week.
He claimed that the company received a large number of orders at the Consumer Electronics Show in January and plans to start sales in the US and Europe this fall, initially focusing on a toy-sized interactive robot.
Best Buy and Target logos are displayed as people wait in line to purchase Pokemon trading cards outside a Best Buy store in West Hollywood, California, on March 27, 2026.
Patrick T. Fallon | Afp | Getty Images
Encouraging investment
China’s investment in the USA increased has been declining in the last decade.
Still, officials on both sides are looking for areas where cooperation is possible.
The United States and China will establish trade and investment boards this month focused on non-sensitive sectors, US Treasury Secretary Scott Bessent told CNBC.
Fast-growing Chinese consumer companies are also exploring acquisitions abroad. acquisition of sustainable fashion brand Everlane by online retailer Shein.
Participation continues at the state level.
““I see a lot of collaboration happening,” said Andrea Chartock, deputy director of the Office of Economic Development and Competitiveness at the Washington State Department of Commerce. “I spoke at an event for a Chinese delegation just a few days ago, and we had some presentations from both Washington State and Seattle, as well as from the China side.”
Chartock spoke to me in Chongqing last week as part of a delegation from Seattle. The two metropolitan areas have been “sister cities” for decades; It is a municipal-level agreement aimed at facilitating trade and international exchange.
A few days later in Suzhou, trade ministers of the 21 member economies of the Asia-Pacific Economic Cooperation gathered for a conference.
Senior US APEC official Casey Mace, who attended the meeting, described how Washington is expanding American artificial intelligence solutions across Asia and also encouraging more investment in the US.
He said the Trump-Xi summit contributed to a more “positive” tone in recent working-level discussions.
Meanwhile, Chinese companies are trying to avoid data security concerns and tariff-related risks.
Zou emphasized that AI Speech products do not upload user data and that U.S. customers who choose to purchase any AI features will be served through international data centers.
And Zeroth’s Guo said the U.S. is exploring manufacturing options, particularly in Texas, to reduce tariff exposure.
At the end of the day, “China and the US are still the biggest markets,” he said.
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approaching
23-26 May: Prime Minister of Pakistan visiting china
May 26: Chinese Foreign Minister attends high-level meeting of the UN Security Council
May 27: Nio will officially launch its flagship ES9 SUV
28 – 30 May: Chinese Foreign Minister visits Canada
May 31: China announces official manufacturing PMI for May
June 1: RatingDog China general manufacturing PMI
