Trump Signals Tariff Easing: Expresses a Friendly Stance on the Eve of U.S.-China Talks in Switzerland. U.S.-UK Trade Agreement Signed at the Same Time.

On May 8, President Donald Trump stated that if the upcoming high-level economic and trade talks between the U.S. and China in Geneva, Switzerland, go smoothly, he may consider reducing the 145% punitive tariffs on China. Trump emphasized China's desire to reach an agreement and described the talks as both friendly and substantive. That same day, the United States and the United Kingdom signed a trade agreement covering steel, aluminum, automobiles, and agricultural products. This marks the first bilateral agreement completed by the Trump administration since the implementation of global tariff policies, indicating a potential shift in U.S. trade policy direction.

Trump: Tariffs "Can't Go Any Higher," China "Eager to Make a Deal"

At a press conference held in the Oval Office, Trump expressed optimism regarding the upcoming high-level U.S.-China talks scheduled for May 10-11 in Geneva, Switzerland. He noted that China is "very eager" to make a deal with the U.S. and mentioned that he gets along "very well" with Chinese President Xi Jinping, despite their relationship being strained by the COVID-19 pandemic.

Trump stated that the current tariffs on Chinese goods have reached 145% and "can't go any higher," adding, "We know it will come down." When asked if he would lower tariffs before the talks to gain negotiation opportunities, Trump clearly stated "no," but also added "we'll see how things develop," indicating a flexible attitude.

U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will represent the U.S. at the talks, while Vice Premier He Lifeng will lead the Chinese delegation. The two sides will discuss issues such as tariffs, trade deficits, and market access. According to a Chinese statement, the talks are being held "at the request of the U.S.," with China emphasizing that negotiations must be based on "mutual respect" and opposing any form of pressure.

Background of the U.S.-China Tariff War: 145% Tariffs on China and 125% Retaliatory Tariffs

Since the Trump administration announced a 145% tariff on Chinese goods in early April, U.S.-China trade relations have deteriorated sharply. China immediately retaliated with a 125% tariff on U.S. goods. The wide-ranging tariff measures have nearly frozen bilateral trade. Reports indicate that the cumulative tariffs on some U.S. goods have reached up to 245%, while the number of Chinese export ships to the U.S. has decreased by 60% annually, and cargo volume at the Port of Los Angeles has plummeted by 35%.

Although both sides have expressed a desire to ease tensions, there is currently no clear draft agreement. Bessent stated in a media interview that the primary goal of the talks is to "ease tensions" rather than immediately reach an agreement.

U.S.-UK Trade Agreement Signed Covering Steel, Aluminum, Cars, and Agricultural Products

Simultaneously with the U.S.-China negotiations, a trade agreement between the U.S. and the UK has been signed. Trump announced on May 8th that the two sides have completed a "comprehensive and complete" agreement, covering various tariff adjustments and market access measures. This is the first formal bilateral trade agreement signed by the Trump administration since implementing global tariff policies.

According to the agreement, the U.S. will remove the 25% tariff on UK steel and aluminum products and significantly reduce the tariff on UK car exports to the U.S. from 27.5% to 10%. UK car manufacturers will receive an annual duty-free export quota of 100,000 vehicles. Additionally, the UK will remove tariffs on U.S. ethanol products and allow 13,000 tons of UK beef to be imported into the U.S. duty-free.

In return, the UK has committed to purchasing $10 billion worth of aircraft from Boeing and making concessions on the digital tax imposed on large U.S. tech companies. The two sides also agreed to hold follow-up discussions on pharmaceutical trade and other remaining tariffs.

Trump stated at the press conference, "This is a historic agreement that reflects our special relationship with the UK." UK Prime Minister Keir Starmer said via video that it is a "truly remarkable, historic day," emphasizing that the agreement will promote bilateral employment and investment.

U.S. Trade Strategy Shifts: Multilateral and Bilateral Agreements Progressing Simultaneously

The Trump administration has recently been actively promoting multilateral and bilateral trade agreements. In addition to the UK, the U.S. is also negotiating with countries such as Japan, Vietnam, India, and the EU. According to the White House, these agreements will be conducted in a "phased, differentiated" manner, offering tariff reductions to countries that align with U.S. policies.

Trump stated, "We have many agreements in the works, and more news will be coming soon." He emphasized that the U.S. will promote a fair and reciprocal trade system with "economic security as national security" as the core principle.

References

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