In a high-stakes meeting between the US and China, Beijing urges the US to reconsider the ‘serious negative impact’ of tariffs on both economies

As the US-China trade war continues to disrupt the global economy, China has condemned the “serious negative impact” of the sweeping tariffs imposed by President Donald Trump. The remarks come ahead of critical trade talks between China’s Vice-Premier He Lifeng and US Treasury Secretary Scott Bessent, which will take place in Switzerland from 9 to 12 May. The meeting is the first significant discussion since the implementation of tariffs that have severely affected both countries.

China’s commerce ministry stated that it agreed to send He for talks after the US initiated the request, though both sides have presented conflicting accounts regarding who took the first step. China’s ministry stressed that if the US seeks a resolution, it must acknowledge the damage caused by these unilateral tariff actions.

Bessent, in an interview with Fox News, noted that the talks would focus on de-escalating the trade war rather than negotiating a new trade deal. “This isn’t sustainable,” Bessent said, acknowledging the escalating nature of the tariffs and their negative economic effects.

Since Trump’s tariffs began, US duties on Chinese imports have surged to 145%, with China retaliating with tariffs of 125%. Both sides have introduced exemptions for certain products to cushion the blow to their economies, such as US exemptions for smartphones and other electronics, and China’s exemptions for pharmaceuticals and microchips. However, these efforts have not been enough to prevent significant economic strain.

China’s factory activity slowed considerably in April, an indication of the trade war’s toll on production. Meanwhile, the US’s decision to close a loophole that allowed low-value goods to enter the country duty-free has also caused financial setbacks for China, with reports indicating a loss of $66bn in 2023 alone from this exemption.

The trade war’s broader impact has been severe. The World Trade Organisation estimates that China’s exports to the US, valued at $440bn last year, could plummet by 77% if the tariffs persist. Despite the economic pain, China has reiterated its resolve to continue the fight, confident that it can endure more hardship than the US.

In addition to the trade talks, Beijing is positioning itself as a stable alternative to the US in international relations, attempting to secure new partnerships with other countries. “China notes that some economies are also in talks with the US,” the commerce ministry said, stressing that “appeasement cannot be turned into peace, and compromise cannot be respected.”