Hot off the Press: Latest Update on US-China Tariff Talks
U.S. President Trump engages in conversation with Chinese President Xi amid halts in negotiations concerning tariffs between the two nations.
There's a spark in the global trade arena as President Trump and Chinese leader Xi Jinping reconnected over the phone, straddling volatile unsettled tariff negotiations between their respective countries. The Chinese foreign ministry has verified the conversation, stating Trump initiated the call, while the White House remained tight-lipped about the matter initially.
Trump, via his social media platform, had previously expressed his reservations about reaching an agreement with Xi, stating that the Chinese leader was tough and hard to make a deal with. This was following the halt in trade talks shortly after their May 12 agreement, where both countries agreed to lessen their tariff rates while negotiations were underway.
The sticking points have stemmed from competing interests, with the US accusing China of export restrictions on critical minerals, and the Chinese government resenting American limitations on the sale of advanced chips and impediments to student visas for Chinese students pursuing college and graduate degrees.
As a gesture of goodwill, Trump had reduced his 145% tariffs on Chinese goods to 30% for 90 days, while China responded by lowering its taxes on US goods from 125% to 10%. Unfortunately, the tit-for-tat has led to market turbulence and endangered bilateral trade.
Treasury Secretary Scott Bessent had opined that a direct conversation between Trump and Xi was vital to bridge these differences and rekindle earnest talks. Nevertheless, the underlying tension between the two superpowers might still persist.
Even if negotiations resume, Trump seeks to reduce America's dependence on Chinese factories, aiming to rejuvenate the US manufacturing sector. Contrariwise, China desires the liberty to continue its technological advancements, such as electric vehicles and artificial intelligence, which are vital to safeguarding its economic future.
Historically, the US has run an annual trade deficit with China of $295 billion, as reported by the Census Bureau. The Chinese government's manufacturing-focused strategy has propelled it to a prominent position in global politics and the economy. However, China has struggled with a decelerating economy following a real estate crisis and COVID-19 pandemic-induced lockdowns that weakened consumer spending.
Trump and Xi had last communicated in January, mere days before Inauguration Day. Their discussions then centered around trade and Trump's demands for China to curb the flow of synthetic opioid fentanyl into the US. Interestingly, Trump recently expressed skepticism regarding China living up to its end of the bargain, stating that the country had breached its agreement with the US.
Sources: Associated Press, enrichment data.
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