Will the US-China trade war subside?

Previously, the countries exchanged multiple increases in import duties on each other's goods, making trade between them virtually impossible. Is there any hope for a softening of positions?

Representatives of China and the United States met in Geneva on May 10 for talks on settling economic issues. The coordinator for the Chinese side was Vice Premier of the State Council of the People's Republic of China He Lifeng, and for the United States, Secretary of the Treasury Scott Bessent.

As foreign media outlets note, this is the first high-level meeting since Donald Trump imposed 145 percent tariffs on Chinese goods in January, and Beijing responded with 125 percent tariffs on many American goods.

The US president has sent mixed signals about the desired outcome of the meeting, Bloomberg notes. Trump has repeatedly said he is unwilling to lower tariffs without concessions from China, but on Friday he said the 80% rate “seems like the right thing to do.” However, Bessent noted that the talks are in their early stages, with the focus on reducing tensions rather than reaching a comprehensive agreement.

But Trump himself said Thursday that he expected “substantial” progress. Commerce Secretary Howard Lutnick told Fox News Friday night that if negotiations were successful, tariffs would “come down to humane levels.”

Bloomberg Economics estimates that tariffs at current levels would wipe out 90% of bilateral trade. As CNN notes, to say that Americans “depend on a wide range of Chinese goods” is to understate how pervasive they are in everyday life. Shoes, clothing, appliances, microchips, baby products, toys, sporting equipment, office equipment parts and more all flow into the US from China in staggering quantities. But now investment bank JPMorgan expects imports from China to the US to decline by 75-80%, the channel writes. In addition, it is worth considering the impact on prices: according to Goldman Sachs, inflation in the States could double to 4% by the end of the year. The impact of sky-high tariffs is also keenly felt in China, whose exports to the US fell sharply in April. According to CNN calculations, outgoing shipments from China to the US totaled $33 billion last month, a whopping 21% decline from nearly $42 billion in April 2024.

The BBC (blocked in Russia) notes that Xi Jinping was the guest of honour at the Victory Day parade in Moscow on Friday, where he stood alongside leaders of the Global South, reminding the Trump administration that “China not only has other options for trade relations, but that it has positioned itself as an alternative global leader.” This allows Beijing to project strength even when it sits down at the negotiating table, the newspaper writes.