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(Bloomberg) — Talks between the US and China on trade and other issues are stuck at lower levels, people familiar with the matter said, with both sides talking past each other and failing to agree on the best way to proceed.

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While representatives from the two countries have had contact, officials in Beijing say the US hasn’t outlined detailed steps they expect from China on fentanyl in order to have the tariffs lifted, according to the people, who asked not to be identified. The second wave of duties imposed last week took working-level officials on both sides by surprise. 

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President Donald Trump’s team rejects the assertion that it hasn’t given clear demands on fentanyl, pointing to messages the White House has sent to China through diplomats in Washington, including Ambassador Xie Feng, according to a person familiar with the matter. 

Those included asking China to stop sending chemicals to produce the drug to Mexico, use the death penalty for smugglers and order the People’s Daily newspaper to run a front-page article condemning the fentanyl trade, the person said. The official mouthpiece of the Communist Party generally reserves that space for coverage of President Xi Jinping. 

The disagreements between the two sides — including on whether clear demands have been given — represents a fundamental mismatch in how Trump and Xi do diplomacy. While the US leader has personally negotiated on trade with counterparts from Canada and Mexico, protocol in Beijing typically requires most details to be sorted out before Xi gets on the phone with Trump. 

Xi and Trump haven’t spoken since both leaders pledged to retain “strategic communication channels” in a phone call days before the Republican took office, even though the US president said in early February that another conversation would soon take place. A person familiar with the White House thinking said no planning for an in-person meeting between the two leaders is currently taking place.

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A White House official said the US has made its expectations clear to China. Treasury, and Commerce Department didn’t respond to requests for comment. China’s foreign, commerce and finance ministries didn’t reply to requests for comment.

China’s Commerce Minister Wang Wentao said last week that he’d written to his US counterpart Howard Lutnick in February, saying he hoped “both sides can meet at an appropriate time.” Treasury Secretary Scott Bessent held a call with Chinese counterpart He Lifeng last month, largely to trade complaints.

Chinese officials prefer to set up a communication channel between Foreign Minister Wang Yi and National Security Adviser Mike Waltz, similar to the arrangement during the Biden era. 

When Wang visited New York last month for United Nations meetings, nobody from the Trump administration reached out to him, according to a person familiar with the situation, adding that China saw it as a lost opportunity for an important back channel.

The inability to establish trusted communication links is leading to frustration in Beijing, said Wu Xinbo, an adviser to the Foreign Ministry in Beijing, who last year led a group of Chinese experts connected to the government to meet politicians and business executives in the US. 

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“The Trump team hasn’t yet figured out exactly what they want to get from China,” said Wu, who is the director at Fudan University’s Center for American Studies in Shanghai. “There isn’t a coherent policy.”

Xi has told his lieutenants to stay “calm” and had been strategic with his retaliation to the US tariffs, deploying targeted measures like levies on soybeans that avoid blowback at home while inflicting pain on Trump voters. But that patience is being tested, with Wang using a high-profile briefing last week to brand US tariffs as “evil” and accuse Trump of “two-faced acts.”

China is agitated that its efforts to stem the fentanyl trade — one of the few areas of cooperation with the Biden administration — haven’t been acknowledged. This month, it published a white paper that details all the steps it has taken to control fentanyl-related substances, including expanding the list of controlled chemicals and cooperating with US law enforcement.

China is willing to take judicial action against companies and individuals engaged in illegal production of fentanyl precursors, but the US hasn’t provided concrete evidence, according to Da Wei, director of the Center for International Security and Strategy at Tsinghua University in Beijing, who frequently travels to the US for talks with policy makers. China also sees the US approach to fentanyl as “very one-sided” and wants consumption addressed as well, he added. 

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“Without addressing the consumption side, even if China stops exporting precursors, other countries will fill the gap,” Da said. “In fact, fentanyl precursors are not only sourced from China, Mexico, and Canada but also from several other countries.”

Tariff Timing

The timing of Trump’s announcements has contributed to China’s annoyance, with the first tariffs landing in the middle of the biggest annual holiday, when almost all government officials were on leave. The second round fell on the eve of Beijing’s biggest annual political event, which was seen as sending a bad signal, according to a person familiar with the matter. 

Trump himself has given mixed signals on his approach to China. He has released sweeping trade and investment policies that singled out China, yet he’s also said a deal is possible. 

“We want them to invest in the United States,” Trump said last month. He added that the US-China relationship “will be a very good one.”

While Xi is open to negotiating a deal, during Trump’s first term he resisted US attempts to force China to change its laws. 

During the first trade war, China handed out a suspended death sentence for fentanyl smuggling to the US, which Chinese officials then touted as evidence of a “zero tolerance” policy. But the Trump administration now wants more.

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“It’s a bit too much to ask a foreign government to change its legal system, especially when it affects people’s lives,” said John Gong, a former consultant to China’s Commerce Ministry who is now a professor at the University of International Business and Economics, referring to the request for harsher sentences. 

In any talks with China, the US will want to address five main areas, according to a person familiar with the matter. Those are  fentanyl, Beijing’s implementation of a trade deal struck during Trump’s first term, China’s help creating jobs in the American heartland, ensuring the centrality of the dollar in global trade, and Xi’s support in ending the war in Ukraine, the person said.  

The fate of Chinese video app TikTok could also be on the agenda, with Trump saying Sunday he was negotiating with four different possible buyers. Beijing would need to approve any potential sale.

China understands it’ll need to show Trump what it’s willing to offer, such as pledging to increase purchases of American goods including energy and agriculture, one of the people said. It could also pledge to invest in American manufacturing and open up its services industry for US investment, the person added.

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While the urgency for striking a deal is growing, with China facing more tariffs on steel and aluminum this week, Beijing has shown it is reluctant to be rushed into a situation that could backfire.

Trump’s showdown with Ukrainian President Volodymyr Zelenskiy left no doubt about the risks of meeting such an unpredictable leader, said Neil Thomas, a fellow for Chinese politics at the Asia Society Policy Institute’s Center for China Analysis. 

“Chinese diplomats will want ironclad guarantees that no such humiliation will befall their leader,” he added. “The last thing that Xi wants is to be publicly attacked.”

—With assistance from Lucille Liu.

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