U.S.-China Trade Talks: Tariff Adjustments in Discussion
President Donald Trump hinted on Friday at a possible reconsideration of tariffs imposed on China. In a post on his social media platform, Truth Social, he stated, “80% Tariff on China seems right!” referencing ongoing negotiations.
Upcoming Negotiations
This encouraging message from the President arrives just before key meetings scheduled this weekend in Switzerland, where Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer are set to engage with Chinese negotiators. This marks the first documented interaction between the two nations since the trade tensions escalated last month, following Trump’s announcement of tariffs as high as 145% on various Chinese imports, which were met with retaliatory measures from China, including a 125% levy on American goods.
China’s Response
A spokesperson for the Chinese Embassy in the U.S. indicated that the initiative for discussions came from the U.S. side. “After carefully assessing the U.S. messages, China decided to agree to hold discussions,” the spokesperson noted, suggesting a potential thaw in relations.
Despite President Trump claiming to have conversed with Chinese President Xi Jinping about trade, a spokesperson from the Chinese Ministry of Commerce later contradicted this, stating that no negotiations had occurred.
Market Reactions
The prospect of an agreement is anticipated by businesses dependent on Chinese goods, particularly as American consumers have started experiencing increased prices online. Meanwhile, Wall Street is keenly watching for signs of a resolution to the ongoing trade war, which has resulted in market fluctuations recently.
Investor Insights
Equities analyst Adam Crisafulli of Vital Knowledge observed that investors are not overly concerned by Trump’s “80% tariff on China seems right” post since it is seen as part of the negotiation strategy. However, recent reports speculate that tariffs could potentially be lowered to between 50% and 60% following the Geneva talks. A lack of changes, or a mere reduction to 80%, might provoke significant market reactions on Monday morning.
UBS Global Wealth Management analyzed the situation and suggested that tariffs may eventually settle near 34%, given the constructive tone of the talks and both sides’ willingness to negotiate further. Stocks experienced an uptick on Friday as optimism grew regarding potential tariff reductions.
Broader Trade Initiatives
In a separate development, Trump announced a new trade agreement with the United Kingdom on Thursday, fueling speculation that progress could be made with other key trading partners. “Many Trade Deals in the hopper, all good (GREAT!) ones!” Trump shared on Truth Social.
The outcome of the ongoing discussions in Switzerland could have a substantial impact on both nations’ economies as well as global market dynamics. Observers will be closely monitoring the developments that emerge in the coming days.
