The US and China restarted trade talks after decades of rising tensions and the imposition of high tariffs. This weekend, top trade officials from both nations will gather in Switzerland for the first major US-China trade talks since President Donald Trump imposed high tariffs on Chinese imports in January.
Is this the beginning of a new chapter in the US-China Trade War?
It was in retaliation to Trump's tariffs that China retaliated with countermeasures, opening a full-blown US-China trade war. Tariffs between the two competitors now range as high as 125%, with some Chinese items suffering from US tariffs of up to 245%. Following months of political and economic gamesmanship, both countries now appear ready to sit down and talk.
Why Are the US and China Talking Now?
Although tensions have been escalating, Washington and Beijing both recently indicated they are willing to shatter the deadlock. Stephen Olson, a former US trade negotiator and senior fellow at Singapore's ISEAS-Yusof Ishak Institute, reports that the timing is part of a calculated approach by both sides:
Nor do either party wish to look as though they are giving way. The negotiations are taking place now because each feels that they can move on without looking soft.
China's foreign ministry maintained the US had opened up the negotiations, while its ministry of commerce portrayed them as being in response to pressure from US consumers and businesses. Trump, however, went on claiming that Chinese officials want to negotiate since there is a faltering Chinese economy.
"They said we called first?" Trump declared. "They need to check their records," despite later inserting, "It doesn't matter who called first. What matters is what happens in that room."
Strategic Timing Amid Global Events
The timing of these US-China negotiations is no coincidence. President Xi Jinping is on a visit to Moscow, participating in the Victory Day celebrations and strengthening ties with other Global South leaders. This move allows China to project diplomatic power before the Geneva summit, reminding the US that China has other trade partnerships and is growing its global presence.
Economic Pressures Driving Dialogue
Despite nationalist bluster, there is genuine economic pressure on both sides. In China, factory output has declined, with manufacturing activity last month at its lowest since December 2023. A Caixin poll also revealed that China's services sector was at a seven-month low.
The BBC investigation found that the majority of Chinese exporters are struggling to sell goods due to high US tariffs. US consumers and businesses have increasingly complained about the tariff inflationary and supply chain impacts.
What to Expect From the US-China Talks
As US-China trade talks open, both countries are determined to protect economic interests without losing face. A full resolution is not likely at one time, but the return to direct talks represents a seismic shift in global and economic geopolitics.
The outcome of the talks can shape world trade in the coming months, affecting everything from supply chains and inflation to world relations and investment markets.
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