Trump Hints at Tariff Relief as US-China Trade Talks Approach

Trump Hints at Tariff Relief as US-China Trade Talks Approach

US President Donald Trump has signaled that the tariffs imposed on Chinese goods may be reduced, just as trade officials from Washington and Beijing prepare for talks this weekend in Switzerland.

In Short

• President Trump suggests US tariffs on China may be reduced, ahead of high-level trade talks.

• The talks could ease tensions in a trade war that has hit global markets and strained US-China economic ties.

• Experts warn any tariff rollback will likely be limited, with deeper trade issues remaining unresolved.

• Businesses, especially import-reliant ones, are watching closely as tariffs have significantly raised costs.

“You can’t get any higher. It’s at 145, so we know it’s coming down,” Trump remarked during an event unveiling a new trade agreement with the UK—marking the first such deal since his administration imposed sweeping import taxes on numerous countries in April.

The comment was seen as a strong hint toward potential tariff relief. Currently, the US has levied tariffs of up to 145% on Chinese imports, significantly raising costs for businesses and consumers. The upcoming meeting represents the most concrete sign yet that both sides are ready to de-escalate a trade conflict that has rattled global markets.

Hopeful Tone Ahead of Talks

President Trump described the upcoming meeting as “very friendly,” adding, “They look forward to doing it in an elegant way.”

In Beijing, China’s Vice Foreign Minister Hua Chunying echoed this optimism, stating that China has “full confidence” in managing trade tensions with the US. Both governments, facing increasing economic pressure at home, appear motivated to find common ground.

Dan Wang of the political risk consultancy Eurasia Group noted, “The recent signals from both sides suggest a transactional de-escalation is on the table,” in an interview with TIT.

However, analysts caution that the road to a full resolution will be long.

Modest Gains Expected

While the talks have been welcomed as a positive step, former US trade negotiator Stephen Olson warned that any immediate outcome is likely to be limited. “The systemic frictions between the US and China will not be resolved any time soon,” he told TIT.

Olson expects that any tariff reductions coming out of this round of talks will be minor. He added that meaningful progress would require the direct involvement of both presidents, even though the initial discussions will be led by US Treasury Secretary Scott Bessent and China’s top economic planner, Vice Premier He Lifeng.

Economist Eswar Prasad, a former head of the IMF’s China division, added, “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 other restrictions,” in comments to TIT.

Trade Impact Already Evident

Recent data showed that China’s exports to the US dropped by over 20% in April compared to a year earlier. However, China’s total global exports rose more than expected, increasing by 8.1%.

Meanwhile, businesses on both sides of the Pacific are feeling the squeeze. In the US, companies dependent on Chinese manufacturing have been hit hard. Wild Rye, a women’s outdoor clothing brand based in Idaho, reports a major jump in operating costs.

“We have a purchase order that's incoming—about $700,000 worth of goods—which is now costing £1.2 million in levies, up from just £200,000,” CEO Cassie Abel told TIT. She added that the company is now considering selling parts of the business to stay afloat.

UK First to Strike a Deal

Just two days before the scheduled US-China meeting, the UK became the first country to finalize a trade deal with the Trump administration. The US agreed to reduce import duties on select British cars and allow tariff-free access for certain steel and aluminum products.

The agreement provides relief for key UK industries impacted by Trump's recent tariff policies and is expected to inspire other countries to pursue similar deals before the temporary tariff pause expires next month.

Trump initially announced what he called “reciprocal tariffs” on dozens of countries in April but delayed implementation for 90 days to allow time for negotiations.

Conclusion: All Eyes on Switzerland

With high-stakes negotiations about to begin, the business community, global markets, and political leaders will be watching closely. While a full resolution is unlikely in the short term, even modest progress in easing tariffs could bring temporary relief and reduce tensions between the world’s two largest economies.