Shift in tone marks tentative thaw in US–China standoff, but key divides remain
US President Donald Trump has publicly proposed slashing tariffs on Chinese imports from 145% to 80%, in what appears to be a dramatic—though still steep—concession ahead of pivotal trade talks in Switzerland this weekend.
In a Friday post on Truth Social, Trump declared: “80% Tariff on China seems right! Up to Scott B,” referencing Treasury Secretary Scott Bessent, who will lead the US delegation at the Geneva discussions alongside Trade Representative Jamieson Greer. They are scheduled to meet Chinese Vice Premier He Lifeng, Beijing’s top economic official.
The proposed reduction is significant but would still leave tariffs at historically high levels, far exceeding the 10–16% average duties that predated Trump’s April tariff blitz. Analysts caution that an 80% tariff may remain prohibitive to trade and could do little to restore supply chains or ease inflationary pressures in the short term.
An olive branch—or a prelude to stalemate?
Trump’s comments represent a notable softening of rhetoric. Earlier this week, he ruled out any tariff reductions prior to negotiations. On Thursday, however, he signalled optimism: “I think we’re going to have a good weekend with China.” The shift suggests a transactional opening for de-escalation, though the president’s team has tempered expectations.
Commerce Secretary Howard Lutnick said the talks could “de-escalate to where they should be,” but that any broader agreement remained distant. White House officials stressed that Bessent and Greer were entering with “an open mind,” though no preconditions had been set.
China unmoved as trade war hits ports and supply chains
Despite Trump’s gesture, Beijing remains firm. China’s Commerce Ministry reiterated its demand that all unilateral US tariffs be lifted and declared Washington must “rectify its wrongdoing.” Vice Premier He’s primary aim, analysts say, will be to assess whether the US intends to undermine China’s strategic interests.
The trade war, now entering a more entrenched phase, has taken a toll. US imports from China plunged 21% in April, and freight data shows a sharp fall in shipping volumes, with over 90 blank sailings and 30–50% booking declines on Asia–US routes. Import cargo at major US ports is expected to post its first year-on-year decline since 2023, according to the National Retail Federation.
Shipments affected by Trump’s 145% tariff hikes—covering 12,000 containers—have begun arriving at US ports. Goods range from Amazon electronics and Ralph Lauren sweaters to Samsung microwave parts and Ikea furniture. Retailers, including Tractor Supply and Home Depot, have warned of pricing uncertainty and supply disruption.
China wields mineral leverage as strategic counterweight
Meanwhile, China has launched a crackdown on smuggling of strategic minerals such as gallium and rare earths, which are critical to semiconductors and defence manufacturing. Analysts view this as a pointed reminder of Beijing’s leverage in the talks. The US is expected to push for removal of export restrictions on these minerals.
Some fear Beijing could escalate further by trimming its US Treasury holdings—nearly US$800bn—which could rattle financial markets. However, such a move risks strengthening the yuan and undercutting China’s export competitiveness.
Partial rollback most likely—but hopes of full deal fade
Most analysts expect limited progress this weekend. Robin Xing of Morgan Stanley projects US tariffs on Chinese goods could fall to around 45% by year-end, while others suggest a temporary pullback to pre-April levels—still far above the pre-trade war average.
Some concessions may include Chinese promises to crack down on fentanyl-related exports, which could lead to the removal of specific 20% tariffs. Both sides have also carved out product-specific exemptions in recent weeks, ranging from semiconductors to auto parts.
Yet a broader deal resembling the 2020 Phase One agreement appears unlikely. That deal, which included US$200bn in promised Chinese purchases, fell short of targets and has since been discredited in Washington. “We severely doubt the possibility of the US and China reaching something close,” said Tianchen Xu of the Economist Intelligence Unit.
Backdrop of pressure—and political optics
Trump’s administration is under mounting pressure to deliver relief. The US economy contracted 0.3% in Q1, with inflation risks now compounded by tariff-driven import costs. Goldman Sachs forecasts core inflation could double to 4% by year-end. Chinese growth, while stronger than expected at 5.4%, remains below the official target and has prompted banks to lower their forecasts.
Some observers believe Trump is walking a tightrope—balancing a desire for tariff revenue with the economic need to re-stabilise trade flows. His administration’s messaging remains mixed: while floating concessions, it continues to frame China as a strategic rival.
“This is about de-escalation, not a big trade deal,” said Bessent on Tuesday. “We don’t want to decouple. What we want is fair trade.”
Whether the Geneva meeting lays the groundwork for that vision remains to be seen.
