US And China Set to Restart Trade Talks
2min read According to the News Office of the Ministry of Commerce of the People's Republic of China, after a careful assessment of the information provided by the U.S. side, and taking into full consideration global expectations, China's interests, as well as the appeals of U.S. industries and consumers, China has decided to agree to engage with the U.S. side. Vice premier He Lifeng, China's lead representative on economic and trade issues with the U.S., will hold talks with U.S. Treasury Secretary Scott Bessent, the American counterpart, during his visit to Switzerland.
At the same time, the U.S. government has also confirmed that Treasury Secretary Scott Bessent and Trade Representative Jamison Greer will travel to Switzerland later this week to formally restart trade negotiations between the two countries. This will be the first high-level trade talks since former U.S. President Donald Trump imposed "comprehensive tariff hikes."
The planned talks may boost investor sentiment, as they are eager to see a reduction in tariff measures that could severely impact trade between the world's two largest economies. Previously, Trump imposed tariffs of up to 145% on many Chinese imports, while the Chinese government retaliated by imposing 125% tariffs on U.S. goods.
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From a market perspective, these measures are likely to lead to short-term price increases for U.S. manufacturing equipment, clothing, toys, and other affordable goods, significantly raising the cost of living for ordinary Americans.
Therefore, although Trump has repeatedly claimed that halting trade with China would not "lose nothing" for the US and that American consumers are willing to accept the resulting price hikes and reduced product availability, the president's stance has clearly softened amid growing complaints from the american public and his shaky approval ratings.
On April 22, Trump publicly hinted at a potential 180-degree shift in his trade war with China, stating that he might "substantially reduce" the high tariffs imposed on Chinese goods. More recently, Trump has frequently claimed that the U.S. and China are negotiating tariff reductions and expressed willingness to lower tariffs on Chinese goods at some point in the future- though these so-called "negotiations" have been repeatedly denied by China.
Bessent has also recently expressed views similar to the president's. At a private investment conference hosted by jpmorgan chase, Bessent pointed out that the high tariffs between the U.S. and China have actually hindered trade between the two countries, and that such a trade war is unsustainable. As a result, he expects the conflict to ease in the near future. Insiders revealed that Bessent told investors the Trump administration's goal is merely to "rebalance the trade", not a complete rupture or decoupling between the U.S. and China.
In a press briefing on the morning of May 7, China's Ministry of Commerce also mentioned that senior U.S. officials have "recently been signaling adjustments to tariff measures and actively conveying messages to China through various channels, expressing a desire to discuss tariffs and other issues with China." Therefore, after conducting a "careful assessment" of the U.S. information and fully considering global expectations, China's interests, and the appeals of U.S. industries and consumers, China began evaluating the possibility of resuming trade negotiations with the U.S.
However, while this may seem like a positive signal, some professionals, such as billionaire investor Paul Tudor Jones, believe it does not mean the "danger" has passed. Jones noted on Tuesday that Trump might cut tariffs on China by half, but this may not be enough to prevent a market downturn.
"You have Trump, who's locked in on tariffs; you have the Fed, who's locked in on not cutting rates, and that's not good for the stock market."
