Team Trump Seeks China Tariff De-escalation in Weekend Talks
The Trump administration is heading into weekend talks with China contemplating a potentially dramatic tariff reduction in a de-escalatory move that would see both sides slash duties from prohibitive levels set last month to temper the economic pain both are already starting to feel.
People familiar with preparations for the talks, which are due to begin in Geneva on Saturday led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, say the US side has set a target of reducing tariffs below 60% as a first step that they feel China may be prepared to match. Progress in two days of scheduled discussions could see those cuts being implemented as soon as next week, they said.
The talks are likely to be exploratory and more geared toward airing grievances rather than hammering out solutions to the long list of problems each side has with the other, said the people, who asked not to be identified. The situation is fluid, meaning there’s no certainty tariff levels will decline in the near term, they said.
Also high on the US wish list is securing the removal of China’s export restrictions on rare earths used to make magnets as a range of industries face disruption, the people said. Progress has also been made on the issue of fentanyl. The people said separate talks could soon occur on reducing Chinese exports of the ingredients used to make the opiate, which has led to a surge in overdose deaths in recent years.
Both the Treasury and the office of US Trade Representative Jamieson Greer, who is joining Bessent in the talks, declined to comment. In a statement, White House spokesman Kush Desai said: “The administration’s only goal with these talks is to advance President Trump’s America First economic agenda towards fair and reciprocal trade relations. Any discussion about ‘target’ tariff rates is baseless speculation.”
The biggest issue confronting the Trump administration is that tariffs between the world’s two-largest economies have risen so high, with US duties on many Chinese imports at 145%. Even a dramatic de-escalation is unlikely to ease much pain for American consumers amid warnings of higher prices and empty shelves this summer.
In comments Thursday, US officials from President Donald Trump on down made clear their desire to reduce the tariffs he hiked rapidly in response to Chinese retaliation to his April 2 announcement of new duties.
“You can’t get any higher — it’s at 145%, so we know it’s coming down,” Trump told reporters on Thursday as he announced the outlines of a US-UK trade deal. “I think we are going to have a good weekend with China.”
“De-escalating, bringing those rates down to where they could, where they should, be, I think it’s Scott Bessent’s goal. I think it’s the Chinese delegation’s goal as well,” Secretary of Commerce Howard Lutnick told CNBC. “And that’s what the president hopes is a good outcome, is a de-escalating world where we go back to each other and then we work on a big deal together.”
Source : Bloomberg
