Xi Jinping's China Dismisses Trump's 'Groundless' Accusations On Geneva Trade Deal Breach, Vows Strong Retaliation, Even As US Eyes Trump-Xi Meeting - Alibaba Gr Hldgs (NYSE:BABA), Baidu (NASDAQ:BIDU)

China has refuted U.S. President Donald Trump‘s claims of breaching the Geneva trade agreement, labeling them as unfounded.

What Happened: On Monday, China's Commerce Ministry rejected Trump's accusations that Beijing had breached the Geneva trade agreement. The ministry confirmed that China had implemented and consistently upheld the agreement reached in Geneva last month, reported Xinhua News.

The Chinese government stated that the U.S. had “groundlessly” accused the nation of breaching the trade deal and pledged to take aggressive measures to protect its interests.

Trump had accused China of breaching a bilateral deal to reduce tariffs. The ministry countered, stating that the U.S. had imposed several “discriminatory restrictive” measures against China, such as restricting AI chip exports, banning the sale of chip design software to China and revoking visas for Chinese students.

“The U.S. government has unilaterally and repeatedly provoked new economic and trade frictions, exacerbating uncertainty and instability in bilateral economic and trade relations,” the ministry stated.

Why It Matters: This recent dispute follows a series of events that have strained U.S.-China trade relations. On Friday, President Trump accused China of violating an agreement to ease tariffs. Analysts suggest China’s delay in approving rare earth export licenses, over which it holds strategic control, may have fueled Trump’s anger, even though he didn’t directly mention them in his accusations, reported the South China Morning Post.

Following the development. the U.S.-listed Chinese stocks, including Baidu, Inc BIDU and Alibaba Group Holding BABA dropped 2.95% and 2.85%, respectively.

A day prior to that, China called on the U.S. to completely withdraw the unilateral tariff measures when a U.S. federal court blocked Trump tariffs which have now been temporarily reinstated.

Meanwhile, U.S. Treasury Secretary Scott Bessent indicated that trade negotiations between the two countries had reached a stalemate. On Sunday, Bessent stated in an interview with CBS news that he is confident President Trump and Chinese President Xi Jinping would meet “soon” and iron out the differences.