Even as there are signs that President Donald Trump is reconsidering the steep 145% tariffs imposed on Chinese goods, China has shown no sign of relenting. Instead, Beijing retaliated with tariffs of its own that went up to 125%. In a recent video message, China’s Foreign Ministry deplored U.S. pressure tactics, saying, “All bullies are just paper tigers. Kneeling only invites more bullying.”
The current trade war between the world’s two largest economies, which exchanged over $660 billion worth of goods last year, has set world business and financial markets on edge.
High-level talks begin in Geneva
Trump’s trade team, headed by chief negotiator Jamieson Greer and Treasury Secretary Richard Bessent, will meet with Chinese officials in Geneva this weekend. In a Truth Social message, Trump lured with flexibility, writing, “80% Tariff seems right! Up to Scott.” However, experts remain skeptical that meaningful progress will be made soon.
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“These are conversations about conversations,” explained Craig Singleton, Foundation for Defense of Democracies senior China fellow. “There is no common roadmap or well-defined path to de-escalation.”
Mutual dependence, mutual pain
Both nations are discovering that reliance goes both ways. American companies rely on Chinese imports—not just for consumer goods, but also for simple manufacturing inputs. All 47% of U.S. imports from China are manufacturing inputs like auto parts and machinery, according to the National Association of Manufacturers.
At the same time, China has tried to diversify out of the American market. In 2018, 19% of Chinese exports were headed to America; in 2024, that was down to 15%.
Tariffs hurt American consumers
Tariffs are now impacting American consumers as well. Various businesses are forced to pass on the added cost to customers. A test by Afina, which produces showerheads, found that if customers were offered a $129 Chinese item over a $239 U.S. item, nobody chose the U.S. version.
Oxford Economics economist Louise Loo stated that China is more likely to locate new buyers than the U.S. is to locate new suppliers. “They’re probably likely to be able to find substitutes for buyers much easier than the U.S. side will be able to find suppliers.”
While Trump has been a tariff defender as a way of raising revenue and returning manufacturing jobs to the U.S., experts argue that the strategy is potentially failing. “The idea that he was going to bring China to its knees on tariffs was never going to work,” said Jeff Moon, a former U.S. trade official.
As American retailers threatened to create shortages on the shelf and financial markets anxiously reacted, the pressure for a solution increased.
Hope for a breakthrough, but no guarantees
The two remain far apart, disagreeing even on who requested the next round of talks. “The meeting is being held on the initiative of the U.S. side,” China’s Foreign Ministry announced. Trump responded, “They should go back and look through their files.”
Still, the mere fact that talks are ongoing is in the right direction. EU Chamber of Commerce in China President Jens Eskelun was cautiously optimistic: “Lock them in a room, and then hopefully white smoke will come out.”
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