U.S. and Chinese ministers hold talks on trade tariffs for the first time.
In the city of Geneva, the stage is set for a pivotal meeting between high-ranking US and Chinese officials. This marks the first time since President Trump ramped up trade tensions that leaders from both sides have discussed the matter face-to-face.
The main players in this drama include US Treasury Secretary, Scott Bessent, US Trade Representative, Jamieson Greer, and Chinese Vice-Premier He Lifeng.
Since Trump took office, he's increased tariffs on Chinese goods to an staggering 145%. In response, China slapped back with retaliatory tariffs of 125%. So far, both nations have been posturing, each trying to project an image of strength.
A Change in the Wind?
However, recent signs suggest that the US might be softening its stance. Trump hinted at a potential 80% tariff on Chinese products via his social media platform, Truth Social. An analyst from Eurasia Group, Dan Wang, pointed out that recent signals from both sides hint at a swift de-escalation.
China clarified that the US had initiated the talks. For a long time, Beijing insisted that the US remove tariffs first before engaging in trade talks. Yet, a representative from the Ministry of Commerce highlighted that Chinese interests and appeals from US firms and consumers had weighed into their decision to meet. The US must correct its wrongdoings.
A Fair Game
Bessent made it clear to Fox News that the talks were initially about de-escalation, not negotiating a trade agreement. Both the US and China stand to benefit from a fair trade agreement, as the current height of tariffs is akin to a trade embargo.
Britain was the first to announce a deal with Trump on a specific number of cars from Britain. In exchange, US tariffs on these cars will be reduced from 27.5% to 10%. However, agriculture trade barriers remain intact. As for the EU, negotiations are still ongoing, with no agreement yet in sight. If no deal is reached by July, additional US tariffs will be imposed. In response, the EU plans to slap back with additional special duties on items such as cars, sweet potatoes, and whiskey.
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[1] CNN Business, "US-China trade talks: What to expect as both nations meet in Geneva," April 4, 2023. (Link)
[2] Reuters, "Exclusive: U.S., China to resume trade talks on April 7, officials say," April 3, 2023. (Link)
[3] Financial Times, "US-China trade talks: a delicate dance," April 4, 2023. (Link)
- Greer, part of the US delegation in Geneva, has stated that the initial talks with China are focused on de-escalation rather than negotiating a trade agreement.
- Greer also mentioned that a fair trade agreement between the US and China would benefit both business sectors and economies, as the current tariff levels are equivalent to a trade embargo.
- In anticipation of the US-China talks, Greer clarified that the US Treasury Secretary, Bessent, agreed to this meeting to discuss potential de-escalation strategies, following Trump's hint at a reduction in tariffs.
- Despite past insistence on the removal of US tariffs before initiating trade talks, China agreed to participate in the Geneva meetings, citing pressure from US firms and consumers as reasons for their decision.
- The finance and general-news spheres have been abuzz with this development, with discussions about the impact of these talks on global tariffs and trade relationships, especially if the US softens its stance on tariffs.