US, China Set to Resume Trade Talks in Switzerland to Ease Tariff Tensions

US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer will travel to Switzerland later this week for trade talks with China, led by Vice Premier He Lifeng, as per Bloomberg.

These talks are aimed at de-escalating the ongoing tariff dispute between the two countries, which has significantly affected both economies.

This will mark the first confirmed trade discussions since President Donald Trump imposed tariffs as high as 145% on Chinese goods, prompting retaliatory measures from China, including 125% tariffs on US exports. The focus of the upcoming discussions is expected to be on reducing tensions rather than reaching a comprehensive trade agreement.

In a recent interview, Bessent stated that the current tariff rates are unsustainable and effectively function like a trade embargo.

“We’ve got to de-escalate before we move forward,” he said. “We don’t want to decouple, what we want is fair trade.”

Following the announcement of the trade talks, China’s Ministry of Commerce issued a statement emphasizing the need for both sides to engage in “equal consultation” and resolve their differences. The ministry also reiterated that China would not accept coercion under the guise of negotiations, emphasizing that its principled position on international fairness would remain unchanged.

In response to the trade tensions, China has recently made moves to ease its domestic economic pressures, including reducing its policy rate and lowering the reserve requirement for banks. China’s Securities Regulatory Commission Chairman Wu Qing criticized the US tariffs, stating that they had “severely disrupted global economic and trade orders.”

The announcement of the trade talks helped lift market sentiment, with US equity-index futures rising and the dollar strengthening. The tariff dispute has contributed to market volatility, increasing concerns about rising prices for manufacturing goods and everyday consumer items in the US.

Bessent acknowledged that the uncertainty surrounding President Trump’s trade strategy could be unsettling for markets, but noted that this uncertainty could provide an advantage in negotiations. He emphasized that while the Trump administration has clear objectives, the specifics of what the US is willing to accept in trade talks would not be publicly disclosed.

President Trump has recently expressed a willingness to reduce tariffs on China at a later stage, although he also stated that the US is “losing nothing” by not trading with Beijing. He has suggested that American consumers may be willing to accept higher prices and fewer choices if it helps address the trade imbalance with China.

Meanwhile, billionaire investor Paul Tudor Jones forecasted that Trump could reduce tariffs on China by half, but warned that such a move might not be enough to prevent market downturns.

In addition to meeting with Chinese officials, Bessent and Greer are also scheduled to meet with Swiss President Karin Keller-Sutter as part of their diplomatic efforts.