Trump team seeks tariff cuts and rare earth metals resolution in China talks - Bloomberg
Kyiv • UNN
The Trump administration is considering tariff cuts of up to 60% in negotiations with China in Geneva. This is intended to reduce tensions and ease economic difficulties for both sides.
The administration of US President Donald Trump is considering a sharp reduction in tariffs during negotiations with China this weekend to ease tensions and mitigate the economic difficulties that both sides are already beginning to feel, Bloomberg reports, writes UNN.
Details
People familiar with preparations for the talks, which are scheduled to begin in Geneva on Saturday under the leadership of US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, say the US side has set a goal of lowering tariffs below 60% as a first step, which they believe China may be willing to take. Progress over the two days of scheduled discussions could lead to these cuts being implemented as early as next week.
The talks are likely to be of an exploratory nature and will be more focused on expressing grievances rather than developing solutions to the long list of issues that each side has with the other, sources said. The situation is unstable, so there is no certainty that tariff levels will be reduced in the near future, they said.
Also high on the US wish list is ensuring the removal of restrictions on the export of rare earth metals used to make magnets, as a number of industries face disruptions, people say. Progress has also been made on the issue of fentanyl. People say separate talks on reducing Chinese exports of ingredients used to make the opiate, which has caused a surge in overdose deaths in recent years, could take place soon.
In a statement, White House Press Secretary Kush Desai said: "The administration's sole goal in these negotiations is to advance President Trump's 'America First' economic agenda toward fair and reciprocal trade relations. Any discussion of 'target' tariff rates is baseless speculation."
The biggest problem facing the Trump administration is that tariffs between the world's two largest economies have risen so high that US tariffs on many Chinese imports are 145%. Even a sharp de-escalation is unlikely to alleviate the pain of American consumers amid warnings of higher prices and empty shelves this summer, the publication notes.
In comments Thursday, US officials, starting with President Donald Trump and continuing, made it clear their desire to reduce tariffs, which he quickly raised in response to China's response to his announcement of new tariffs on April 2.
"There's nowhere to go higher - 145%, so we know they're going to go down," Trump told reporters Thursday, announcing the outlines of a trade deal between the US and the UK. "I think we're going to have a good weekend with China."
"De-escalation, bringing those rates down to where they could be, where they should be, I think that's Scott Bessent's goal. I think that's also the goal of the Chinese delegation," US Commerce Secretary Howard Lutnick told CNBC. "And that's what the president hopes is a good outcome, a world without escalation, where we go back to each other and then work on a big deal together."
US stocks rose Thursday as investors welcomed Trump's comments on trade talks with China. Hopes that the US would settle trade deals helped lift the S&P 500 overall to where it was before Trump's announcement of reciprocal tariffs in early April, which was Wall Street's worst day since 2020. Asian stocks rose on Friday.
Chinese officials, meanwhile, have been cautious about their goals for the talks. Beijing on Thursday reiterated its call for the Trump administration to lift unilateral tariffs on China, and Chinese Ministry of Commerce spokesman He Yadong said the US "must show sincerity in the talks and be prepared to correct its mistakes."
US actions to reduce tariffs could be comparable to those of China, said Song Hong, deputy director of the Institute of Economics at the Chinese Academy of Social Sciences, a leading government think tank in Beijing.
"The US will have to take the initiative to reduce its tariffs for China, because the trade war was started on their side," Song said. "If they cut existing tariffs to, say, 60% or lower, I think China will follow suit and cut its tariffs on US goods quite quickly."
However, it is unlikely that all tariffs will be lifted, he said, amid the fact that the US has been calling China a strategic rival for many years. "China no longer has any illusions that US policy toward China will change," he said.
