Freshened Up and Rebooted
Prior to negotiations, Trump expresses favor for imposing an 80% duty on Chinese imports
As high-level trade talks with China loom this weekend in Switzerland, President Trump took to social media on Friday to hint he may lower current U.S. tariffs on Chinese goods from their jaw-dropping up to 245% to a more palatable 80%.
"80% Tariff on China? Hell yeah, that's about right, Scott B!" Trump tweeted, in a nod to Treasury Secretary Scott Bessent, who will spearhead the American delegation in the negotiations.
This consultation will mark the first face-to-face trade discussions between the two powerhouses since Trump's inauguration. Both economies have seen rising tensions and import levies in recent weeks, with analysts and officials urging restraint and stressing the unlikely prospect of a quick trade deal.
"If one side talks the talk but doesn't walk the walk, or keeps trying to bully under the guise of conversations, China won't tip its hand, let alone compromise its principles for a fair and equitable world," said a spokesperson for China's Commerce Ministry.
Prior to the dialogue, China has demanded a wholehearted rollback of U.S. tariffs, a demand the White House has flatly rejected, though Trump has hinted at possible reductions in the tariffs post-negotiations.
"You can't top 145, and we both know the tariffs are coming down," Trump noted, referring to recent U.S. tariffs implemented in recent weeks. This would topple Chinese import taxes on some goods to an astronomical 245%, while American goods destined for China would face a 125% import tax.
The Geneva talks will mostly focus on Bessent and U.S. Trade Representative Jamieson Greer, accompanied by Vice Premier He Lifeng, a leading Chinese economic official. Although China has previously sought dialogue with the U.S. during a similar trade war in 2019, it has maintained a tough stance this time around, vowing to "fight till the bitter end."
The talks provide both sides an opportunity to air their grievances and depict their desired outcomes. Thus far, it is unclear exactly what the U.S. aims to achieve with its tariffs on China. Trump has emphasized punishing China for its lax fentanyl control and increasing its imports from the U.S., while also motivating overseas manufacturers to settle on American soil.
"If the U.S. wants to solve its problem through dialogues, it must acknowledge the severe economic consequences brewed by unilateral tariff measures and the devastating impact they have on global trade," said He, the Commerce Ministry spokesperson.
Researchers at the Peterson Institute in Washington point to the U.S. administration's lack of foresight regarding the economic fallout from the tariff policy and China's strong pushback as significant factors impeding a direct resolution. China's exporters have coped with the high tariffs by boosting exports to other nations, while simultaneously bolstering their own supply chains for both finished and intermediate products, including technological components, to minimize their reliance on foreign markets.
In preparation for an economic standoff with the U.S., China has also recently loosened up monetary regulations to release around 1 trillion renminbi (approximately $138 billion) in liquidity to buffer its economy against the U.S. tariffs. Furthermore, China has intensified its trade diplomacy throughout Southeast Asia, forging alliances and trade deals that exclude the U.S.
"China feels it has solid ground to advocate for maintaining and fostering the existing global trade framework, and is soliciting the support of other nations," quipped Dinny McMahon, director of market research at Trivium.
- The U.S. tariffs on Chinese goods, currently at up to 245%, may be reduced to 80% as per President Trump's social media hint.
- China has demanded a rollback of U.S. tariffs prior to the upcoming trade talks in Geneva.
- The White House has rejected China's demand for a complete rollback, though Trump has hinted at possible reductions post-negotiations.
- China's Commerce Ministry spokesperson has stressed that China won't compromise its principles for a fair and equitable world.
- Researchers believe the U.S. administration's lack of foresight on economic fallout from tariff policy and China's strong pushback are significant factors impeding a direct resolution.
- As a preparation for an economic standoff with the U.S., China has loosened monetary regulations and intensified its trade diplomacy throughout Southeast Asia.