Bessent calls for de-escalation; Beijing demands Washington face ‘serious negative impact’ of Trump’s unilateralism
The United States and China will hold their first official trade talks this week since President Donald Trump imposed sweeping tariffs on Chinese goods, with both sides seeking to defuse tensions that have pushed the global economy toward the brink of recession.
US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will meet Chinese Vice Premier He Lifeng in Switzerland from 9 to 12 May, in what Bessent described as an effort to “de-escalate” rather than broker a comprehensive deal.
“We don’t want to decouple,” Bessent said in a Fox News interview. “What we want is fair trade… but we’ve got to de-escalate before we can move forward.”
The talks follow Trump’s decision to raise tariffs on Chinese imports to 145%—a move that triggered immediate retaliation from Beijing, which slapped 125% duties on select US goods. While some product categories, including smartphones and microchips, have been exempted to limit domestic blowback, both sides remain locked in a trade war that economists warn could spiral further.
Economic fallout mounting
The tariffs are already being felt. The US economy shrank by 0.3% in the first quarter—before most of the new tariffs took effect—and JPMorgan now places the risk of a US recession this year at 60%. The International Monetary Fund has cut its global growth forecast for 2025 from 3.3% to 2.8%, citing rising trade barriers as a key drag.
China’s factory activity slowed in April, and US authorities recently closed a longstanding exemption that allowed low-value Chinese goods to enter duty-free—a policy estimated to have brought China $66 billion in 2023 alone.
In parallel, the World Trade Organization now estimates Chinese exports to the US could plunge by as much as 77% this year if tariffs remain in place.
Diverging rhetoric ahead of talks
While both governments have confirmed the Swiss meeting, they disagree on who initiated the dialogue. Beijing says it agreed to the talks after “considering Chinese interests and the appeals of US industry and consumers,” while Washington frames the engagement as mutual.
China’s Commerce Ministry stressed that negotiations must occur on the basis of “mutual respect, equality, consultation, and mutual benefit.” A spokesperson said the US must “acknowledge the severe negative impacts its unilateral tariff measures have had on itself and the world” and “correct its wrongful actions.”
In remarks to state media, China also warned that appeasement is not peace, and vowed to “safeguard international fairness and justice.” While signalling openness to discussion, Beijing reiterated that it is prepared to “fight to the end” if needed.
Trump stands firm on tariffs
President Trump, speaking from the White House, ruled out reducing tariffs to incentivise talks. When asked whether he would consider lowering import duties to bring China to the table, he replied simply: “No.”
“We were losing a trillion dollars a year, now we’re not losing anything,” Trump said, without providing further detail. His administration has framed the tariff hikes as a corrective to decades of perceived economic imbalance.
Bessent, by contrast, acknowledged that the current situation is untenable. “This isn’t sustainable,” he said. “We will agree what we’re going to talk about. My sense is that this will be about de-escalation, not about the big trade deal.”
Markets cautiously hopeful
News of the talks helped lift markets in mainland China and Hong Kong, with US stock futures also edging higher. But analysts remain sceptical about a swift resolution.
“You have to start somewhere,” said Deborah Elms of the Hinrich Foundation. “Just unlikely to be the launch event people are hoping to see.”
Henry Gao, a law professor at Singapore Management University, expects the negotiations to stretch out. “We should expect to see a lot of back and forth,” he said, drawing parallels to the drawn-out negotiations of 2018.
With political stakes high on both sides and economic damage mounting, the Swiss talks may offer little more than a pause. But for now, even a pause may be enough to keep global markets from unraveling further.
