The U.S. Treasury Secretary and the country’s top trade negotiator will meet with high-ranking Chinese officials this weekend in Switzerland. They hope to solve a trade dispute that could harm both countries’ economies and the global market. U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will meet with Chinese Vice Premier He Lifeng in Geneva. Though there may not be a big breakthrough, both sides hope to lower the large taxes (tariffs) they’ve put on each other’s goods. This would help global financial markets and companies that depend on trade between the U.S. and China.
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Last month, President Donald Trump raised U.S. tariffs on Chinese goods, and China responded by adding a 125% tax on American imports. Such high tariffs make it almost impossible for these two countries to trade, which last year was worth over $660 billion. Even before the talks, Trump suggested the U.S. could reduce tariffs on China.
This will be the first time Bessent and He meet in person, and experts like Sun Yun from the Stimson Center think the talks may not lead to a big solution. She said that even a small reduction in tariffs would send a positive signal, but it would need to be followed by real actions.
Since January, Trump has used tariffs to pressure other countries, especially China. His tariffs are partly aimed at stopping the illegal trade of fentanyl (a dangerous drug) into the U.S. Some tariffs on China have been as high as 145%. In the past, the U.S. accused China of using unfair tactics to gain an advantage in advanced technologies like quantum computing and driverless cars. The U.S. also claimed China forced companies to share trade secrets and used government money to support local businesses.
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In January 2020, the U.S. and China agreed to a Phase One deal, where China promised to buy more American products. However, because of COVID-19, China didn’t meet these promises, and the trade issues continued.
Trump is also upset about the U.S. trade deficit with China, which reached $263 billion last year. During their meetings in Switzerland, Bessent and Greer will also talk with Swiss President Karin Keller-Sutter. Trump had planned to raise tariffs on Swiss goods but decided to reduce them to 10% for now.
Switzerland, which has strong trade ties with the U.S., is worried about the impact of tariffs on its industries, like watches, coffee, cheese, and chocolate. The Swiss government is cautious but has warned that raising tariffs would hurt the Swiss economy, especially by making U.S. products more expensive. Switzerland is one of the U.S.’s biggest trade partners, with trade between the two countries growing significantly over the past two decades.
Switzerland has also removed most tariffs on industrial goods, meaning that 99% of U.S. goods can enter Switzerland without paying extra taxes.
