There has been a great deal of progress made on trade talks with China, said US President Donald Trump. Previous relations had been tense with high tariffs, but now things seem to be calming down.
President Trump tweeted on his social media platform, Truth Social, stating, “We had an excellent discussion with China today in Switzerland. Many issues were talked about, and a number of things were agreed upon. The entire process has been redirected positively and amicably. We desire for China to open up for American trade and commerce. Good progress has been made.”
High-Level Discussions Under Way in Geneva
Senior trade negotiations were held over the past two days in Geneva, Switzerland. US Treasury Secretary Scott Bessent and US trade representative Jamison Greer are among others present. The talks would probably continue, according to sources close to negotiations.
The Treasury Secretary, however, had already cautioned that it would be too early to expect a big trade agreement to be a product of this round of talks. Nevertheless, he referred to the talks as a big leap forward. Chinese Vice Premier He Lifeng is heading the Chinese delegation, state television CCTV reported.
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China’s state news agency Xinhua reported the Geneva summit as a significant move toward a resolution of the ongoing trade disputes. However, they reiterated that a resolution would require patience, along with global support.
Tariffs are a major obstacle
Although Trump has suspended retaliatory tariffs on April 2 for a period of 90 days, the US is still imposing a tariff of 145% on Chinese goods. For rettaliation, 125% tariff on American goods has been levied by China. Two-way trade between two economic giants is, hence, narrowing rapidly.
The economists say that even if tariff rates are reduced by half overnight, it will mean little for today’s trade climate. They are of the opinion that trade relations would start normalising only if tariffs are reduced by somewhere around 50%.
Trump Considers Reducing Tariffs
The president also indicated he is seriously contemplating lowering tariffs on Chinese products to 80% if there is an opening of Chinese markets. Writing on his platform on Truth Social, he stated, “An 80% tariff on Chinese goods feels right for now. The rest is up to Secretary Bessent.”
Despite tariffs, Chinese goods are now finding their way into the US, though quantities are lower. Prices for such goods are already up. Goldman Sachs estimates that Trump’s trade war will push the US Consumer Price Index (CPI) up to 4% by year-end. Even with a fresh trade agreement, prices will not immediately drop because goods already are being shipped into the country at elevated tariff rates.
American reliance on Chinese goods
America also relies strongly on a vast array of Chinese goods, from shoes and clothing items to domestic items, microprocessors, toys, sporting goods, and office supplies. Imports are, however, decreasing.
The National Retail Federation predicts US imports are expected to fall by a minimum of 20% by the second quarter of 2025, while Chinese imports are expected to decrease by up to 75–80%, said JPMorgan.
Economic Impact of Television
The American tariffs have been a significant setback for Chinese manufacturing. Factory output softened to a 16-month low in April. This has put further pressure on Beijing to release fresh stimulus into the economy. US Treasury Secretary Scott Bessent’s visit to Geneva is said to kindle hopes for increased relations between the two nations. The US and China are the two largest economies of the world, bigger than a combined 20 economies, according to the World Bank.
