US President Donald Trump recently indicated that tariffs on Chinese imports may soon be reduced. This remark comes as trade officials from both countries prepare for high-stakes talks in Switzerland. Trump referred to the current steep import duties—currently at 145%—stating, “You can’t get any higher. It’s at 145, so we know it’s coming down.”
First Tariff Agreement with the UK Signals New Trade Approaches
The statement was made during a ceremony announcing a new tariff deal with the United Kingdom. This marks the first such agreement since Trump imposed broad levies on a range of countries in April. The announcement of talks between the US and China signals a potential shift in trade policy, offering hopes that both nations may look to reduce tensions.
Optimism from Both Sides, but Caution from Analysts
Describing the upcoming meeting with China, Trump expressed optimism, stating, “I think it’s a very friendly meeting. They look forward to doing it in an elegant way.” Similarly, China’s Vice Foreign Minister Hua Chunying expressed confidence, affirming that Beijing has “full confidence” in managing trade relations with the US.
Despite the positive tone from both sides, experts urge caution. Dan Wang, an analyst at Eurasia Group, pointed to growing economic pressures on both countries. “The recent signals from both sides suggest a transactional de-escalation is on the table,” Wang said.
Experts Warn of Lengthy Negotiations
The announcement of the talks has been widely welcomed, but experts warn that any agreement is likely to take time. Former US trade negotiator Stephen Olson noted that the systemic frictions between the US and China are unlikely to be resolved quickly. “The systemic frictions between the US and China will not be resolved any time soon,” he stated.
Olson also pointed out that any immediate tariff reductions are expected to be modest. The talks will be led by US Treasury Secretary Scott Bessent and China’s Vice Premier He Lifeng. Still, Olson emphasized that any substantial deal would require direct involvement from both presidents.
Trade Barriers Persist Despite Potential Tariff Reductions
Eswar Prasad, a former economist at the IMF, highlighted the remaining barriers even if tariffs are lifted. “Even if Trump’s new tariffs are lifted, key issues remain unresolved,” he said. “A realistic goal is probably at best a pullback from the sky-high bilateral tariffs. But that would still leave in place high tariff barriers and various other restrictions.”
Recent figures show a sharp 20% drop in Chinese exports to the US in April compared to the previous year. However, China’s overall exports increased by 8.1%, outperforming forecasts and indicating resilience in its broader trading operations.
Other Countries Pursue Deals Ahead of US Tariff Hikes
The timing of the US-China talks comes just days after the UK signed its own tariff deal with the US. Under the agreement, the US will reduce import duties on certain British-made vehicles and allow limited steel and aluminum shipments to enter duty-free. This agreement is seen as a sign of the Trump administration’s willingness to negotiate tariff terms.
Following the UK’s breakthrough, other nations are eager to finalize similar agreements before additional tariff hikes from the US take effect. Trump had previously announced reciprocal tariffs on several countries in April but paused implementation for 90 days to allow time for negotiations.
The potential reduction of tariffs on Chinese imports offers a glimmer of hope for de-escalating the trade war between the US and China. However, as experts caution, the road ahead remains challenging. The ongoing talks are expected to focus on a more nuanced resolution that will address the economic pressures faced by both nations. While optimism is growing, the negotiation process will likely be prolonged and complex, requiring cooperation at the highest levels of government.