China’s factory activity contracted at a slower rate in May after a reprieve in the tariff war with the US unclogged trade flows, even as weak domestic demand continues to weigh on the economy.

President Trump said that Beijing was not honoring the terms of a temporary agreement and warned of further confrontation.

Barely a week after a high-profile joint statement signaled a pause in trade hostilities, the U.S. and China are disagreeing again.

China said it will not send its defense minister to the Shangri-La Dialogue in Singapore and recently escalated export restrictions.

Exports of semiconductors jumped 21.2%, thanks to robust demand for advanced memory chips, but car exports fell 4.4% due to U.S. tariffs and production at Hyundai Motor's new factory in the U.S. state of Georgia, according to the ministry.

The United States lowered tariffs on Chinese imports from 145% to 30%, while China cut retaliatory duties on U.S. goods from 125% to 10%.

The U.S.-China trade truce in Geneva earlier this month hinged on Beijing agreeing to resume crucial mineral exports. Now China is slow-walking the concession, and the pact is in jeopardy.

Just weeks after US President Donald Trump declared a “total reset” with China following a trade truce in Geneva, tensions are rising again between the world’s biggest economies.