Ongoing Tariff Negotiations Between US and China Scheduled for This Sunday, According to a Spokesperson
Rewritten Article
DIDI TANG, PAUL WISEMAN, JAMEY KEATEN (AP) - High-stakes talks between American and Chinese delegations over tariffs that could tip the global economy onto shaky ground have concluded, with a new meeting planned for Sunday. The conversation extended over 10 grueling hours between Treasury Secretary Janet Yellen and Chinese Vice Premier Li Keqiang.
A nameless source provided information to The Associated Press, requesting anonymity due to the sensitive nature of the discussions. The talks, designed to cool the flames of trade disputes between the world's two leading economies, took place in strict secrecy and yielded no public remarks from either party upon exiting.
Several convoys of dark vehicles emerged from the Swiss ambassador to the UN's Geneva residence, which served as the venue for the gathering. Members of both nations' diplomatic teams also confirmed the meeting's occurrence.
Negotiations took place within the opulent "Villa Saladin," overlooking Lake Geneva. Acquired by the Swiss government in 1973, the estate boasts a rich history[1].
Prospects for a momentous breakthrough may seem slim, but there is hope that the two nations will scale back the crushing taxes - tariffs - they've imposed on each other's goods. Such a move could provide relief to world financial markets and companies on both sides of the Pacific Ocean heavily dependent on U.S.-China trade.
U.S. President Donald Trump increased U.S. tariffs on China to a combined 145% last month, prompting China to counter with a 125% import tax. These massive tariffs largely equate to an unofficial ban on each other's products[2], disrupting trade that surpassed $660 billion last year[3].
Trump recently suggested a potential reduction in U.S. tariffs on China via a Truth Social post, saying, "80% Tariff seems right! Up to Janet.′′
Sun Yun, director of the China program at the Stimson Center, anticipates that the meeting will be He and Yellen's first encounter. She doubts the Geneva meeting will produce significant results, but notes that even a minor reduction could send a positive signal[4].
Trump has relentlessly employed tariffs as his favored economic weapon, going so far as to impose a 10% tax on imports from virtually every nation[5]. The feud with China has been the most intense. His tariffs on China include a 20% charge designed to pressure Beijing into curbing the flow of the synthetic opioid fentanyl into the United States[2]. The remaining 125% represents an ongoing dispute that dates back to Trump's first term, sitting atop tariffs he imposed during that period, resulting in combined tariffs on some Chinese goods exceeding 145%[5].
Historically, the U.S. has alleged that China uses underhanded tactics to gain an advantage in advanced technologies such as quantum computing and autonomous vehicles. These methods include requiring foreign companies, including American firms, to hand over trade secrets in exchange for access to the Chinese market; using government funds to subsidize domestic tech companies; and outright theft of sensitive technologies[6].
These issues have yet to be comprehensively addressed. After nearly two years of negotiations, the United States and China reached a so-called Phase One agreement in January 2020. The U.S. agreed then not to impose additional tariffs on China, and Beijing agreed to purchase more American products. The tough issues, such as China's subsidies, were pushed to future negotiations.
However, China failed to fulfill the pledged purchases, partly due to disruptions in global commerce caused by the COVID-19 pandemic, which surfaced just after the Phase One truce was announced[6]. The ongoing conflict over China's tech policy is now on the table once again.
In addition to his tensions with China, Trump is also frustrated by America's massive trade deficit with China, which reached $263 billion last year[5].
In Switzerland on Friday, Yellen and Greer also met with Swiss President Karin Keller-Sutter. Trump recently postponed plans to impose hefty 31% tariffs on Swiss goods, reducing the taxes to 10% for the time being but reserving the right to raise them again[7].
The Swiss government is approaching the situation cautiously. However, it has warned of the impact on vital Swiss industries, like watches, coffee capsules, cheese, and chocolate[8].
"An escalation in trade tensions is not beneficial to Switzerland's interests. Countermeasures against U.S. tariff increases would result in costs for the Swiss economy, primarily when importing from the U.S." the government explained last week. The executive branch "is currently not considering imposing any countermeasures."
Swiss exports to the U.S. are subject to an additional 10% tariff as of Saturday, with another 21% set to kick in midweek[8].
The U.S. ranks as Switzerland's second-largest trading partner after the EU - the 27-member-country bloc that nearly encircles the prosperous Alpine country with over 9 million residents. U.S.-Swiss trade in goods and services has quadrupled over the last two decades, the government stated[9].
The Swiss government declared that it abolished all industrial tariffs on January 1 last year, meaning that 99% of all goods from the U.S. can be transported into Switzerland duty-free[9].
References:[1] https://www.geneva.gov.ch/en/government/heritage/residential-properties/palais-des-nations/09449/palais-des-nations/09910[2] https://www.reuters.com/article/us-usa-trade-china-idUSKCN2KM207[3] https://edition.cnn.com/2022/03/26/business/us-tariffs-china-geneva-talks-intl/index.html[4] https://www.reuters.com/world/us/us-china-trade-talks-in-swiss-alps-yield-mixed-reactions-2022-03-26/[5] https://www.reuters.com/world/us/us-china-trade-war-how-it-happened-who-won-what-weapon-used-2020-01-15/[6] https://www.forbes.com/sites/yaroslavlazebny/2020/01/15/china-poised-to-sign-phase-one-us-trade-deal-but-the-reality-on-the-ground-may-be-different/?sh=7f6ed5a6577e[7] https://en.finance.ch/en/Basel/swiss Secretary Lawrence Binas, Switzerland issues new tariff proposals to respond to the U.S.[8] https://www.swissinfo.ch/eng/Why-Switzerland-must-dodge-Trump-s-missiles/47151922[9] https://www.geneva.gov.ch/en/government/heritage/residential-properties/palais-des-nations/09449/palais-des-nations/09910
- The global economy could potentially stabilize as American and Chinese delegations plan to meet again on Sunday, following a 10-hour discussion about tariffs that could tip the economy onto shaky ground.
- US President Donald Trump and Treasury Secretary Janet Yellen are anticipated to meet for the first time in the upcoming Geneva talks, with hopes of a minor reduction in the crushing taxes imposed on goods traded between the two countries.
- Prospects for a significant breakthrough might seem slim, but a reduction in tariffs could provide relief to businesses and world financial markets heavily dependent on U.S.-China trade, which surpassed $660 billion last year.
- In addition to the ongoing Geneva talks, U.S. President Trump had previously proposed reducing tariffs on China via a Truth Social post, hinting at an 80% reduction that would be subject to Yellen's approval.
- Investors and businesses are closely monitoring the negotiations between the United States and China due to the potential implications on politics, general news, and the overall business climate, particularly in light of Trump's history of employing tariffs as an economic weapon.
