CNBC’s The China Connection newsletter: Tariffs eased. Trust didn’t.

Hello, that is Evelyn, writing to you from Beijing. Welcome to the newest version of The China Connection — a succinct snapshot of what I am seeing and listening to from native companies.

Now that the Trump-Xi summit has helped hold tariffs in test, Chinese language firms and U.S. representatives alike are benefiting from an prolonged truce to get some offers going. However is that sufficient to beat information safety and branding hurdles?

For companies navigating U.S.-China tensions, “the worst is over,” Zou Ping, co-founder of AI Speech, instructed me in Suzhou final week.

It was just some days after he’d returned from the U.S., one of many firm’s key development markets because it pushes gross sales of high-end microphones, audio system and digital note-taking tablets.

The firm’s audio system and microphones use on-device AI capabilities to enhance sound high quality and are broadly utilized in firm assembly rooms and college school rooms, he stated.

The timing might hardly be higher.

Earlier this month, the U.S. and China agreed to pursue “constructive strategic stability,” signaling a broader effort to stabilize ties after greater than a yr of escalating tensions and tariff hikes that at one level pushed cumulative duties above 100%.

Now, the prolonged truce suggests these levies might stay at about half these ranges for longer.

For Zou, tariffs and market entry stay the largest considerations. However for no less than the following three to 5 years, he is hopeful that the U.S.-China relationship will not deteriorate additional.

The greater problem for successful U.S. prospects, he stated, is branding.

AI Speech is exploring acquisitions and native hiring as a part of its U.S. growth technique, he stated, hinting at conversations with New York electronics retailer B&H.

The theme echoed conversations I had with different executives: latest journeys to the U.S. and Europe, discussions with main American retailers and renewed plans for abroad development.

“We’re speaking with Finest Purchase proper now,” Guo Renjie, CEO of humanoid robotic startup Zeroth, instructed me in Suzhou final week.

He claimed the corporate obtained many orders on the Client Electronics Present in January, and plans to start out gross sales this fall within the U.S. and Europe, initially specializing in a toy-sized interactive robotic.

Chinese language funding within the U.S. has plunged over the past decade.

Nonetheless, officers on each side are searching for areas the place cooperation stays doable.

The U.S. and China stated this month they’d set up commerce and funding boards targeted on non-sensitive sectors, U.S. Treasury Secretary Scott Bessent instructed CNBC.

Quick-growing Chinese language client firms are additionally exploring abroad acquisitions, such because the reported acquisition of sustainable vogue model Everlane by on-line retailer Shein.

On the state degree, engagement continues.

“I see a number of collaboration taking place,” stated Andrea Chartock, assistant director on the Washington State Division of Commerce’s Workplace of Financial Improvement and Competitiveness. “Just some days in the past, I spoke at an occasion for a Chinese language delegation and we made some displays each from Washington State and Seattle in addition to from the Chinese language facet,” she stated.

Chartock spoke with me in Chongqing final week as a part of a delegation from Seattle. The two metropolitan areas have been “sister cities” for many years — a municipal-level settlement to facilitate commerce and worldwide trade.

Just a few days later in Suzhou, commerce ministers from the 21 member economies of the Asia-Pacific Financial Cooperation gathered for a convention.

Casey Mace, the senior U.S. APEC official attending, instructed me how Washington is pushing American AI options throughout Asia whereas additionally encouraging extra funding within the U.S.

The Trump-Xi summit, he stated, has contributed to a extra “constructive” tone in latest working-level discussions.

Chinese language firms, in the meantime, try to get forward of information safety considerations and tariff-related dangers.

Zou emphasised that AI Speech merchandise don’t add consumer information, and that U.S. prospects who select to purchase any AI options can be served by means of its worldwide information facilities.

And Zeroth’s Guo stated he is exploring U.S. manufacturing choices, significantly in Texas, to scale back tariff publicity.

On the finish of the day, he stated, “China and the U.S. are nonetheless the most important markets.”

U.S. pushes its AI in China and Asia after Trump-Xi assembly

The U.S. is working onerous to make sure American know-how is utilized in Asia, a senior State Division official instructed CNBC, as China races to construct cheaper alternate options. He was talking alongside the Asia-Pacific Financial Cooperation commerce ministers’ assembly that ran from Friday to Saturday.

Job coaching for robots: How China is getting machines prepared to hitch the workforce

At robotic studying facilities in China, folks train machines find out how to work in quite a lot of eventualities. Humanoid robots are a part of Beijing’s greater industrial technique to dominate world markets and provide chains.

China’s second-largest chip foundry Hua Hong says it has ‘all the time been compliant’ with U.S. export controls

Daniel Wang, CFO of Shanghai Hua Hong Grace Semiconductor Manufacturing Company, stated the reminiscence chip increase might last more due to AI. Demand from AI, industrial and automotive purchasers is preserving its fabs working at full capability, with momentum anticipated to proceed into 2026.

Could 23-26: Pakistani Prime Minister to go to China

Could 26: Chinese language International Minister attends high-level assembly of UN Safety Council

Could 27: Nio to formally launch flagship ES9 SUV

Could 28 – 30: Chinese language International Minister visits Canada

Could 31: China releases official manufacturing PMI for Could

June 1: RatingDog China basic manufacturing PMI