America’s top trade negotiator and US Trade Representative Jamieson Geer and US Treasure Secretary Scott Bessent arrived in Switzerland, Geneva, to begin talks with a Chinese delegation led by Vice Premier He Lifeng on the long-running tariff war between the two countries. The talks, which were held at an undisclosed location on Saturday, were being keenly watched by the world although chances of a breakthrough deal were said to be dim.
As photographers captured a motorcade of black cars and vans that was seen leaving the home of the Swiss Ambassador to the United Nations in the wealthy Swiss city, there was renewed hope that the two countries will scale back the massive tariffs imposed on each other’s goods.
Although the disagreements related to trade date back to US President Donald Trump’s first term as President, they escalated last month when the President raised US tariffs on China to a combined 145 per cent, and China retaliated by hitting American imports with a 125 per cent levy. Tariffs that high essentially amount to the countries’ boycotting each other’s products, disrupting trade that last year topped USD 660 billion.
Things had been looking up even before the talks began when Trump suggested Friday that the US could lower its tariffs on China. “80 per cent Tariff seems right! Up to Scott,” he said in a Truth Social post. The world’s financial markets and companies on both sides of the Pacific Ocean that depend on US-China trade are looking at the talks with hope.
Since returning to the White House in January, Trump imposed a 10 per cent tax on imports from almost every country in the world. But, his tariffs on China include a 20 per cent charge meant to pressure Beijing into doing more to stop the flow of the synthetic opioid fentanyl into the United States.
During Trump’s first term, the US had alleged that China uses unfair tactics – including forcing US and other foreign companies to hand over trade secrets in exchange for access to the Chinese market to give itself an edge in advanced technologies such as quantum computing and driverless cars. It also accused China of using government money to subsidise domestic tech firms.
After nearly two years of negotiation on these issues, the United States and China reached a so-called Phase One agreement in January 2020. The US agreed then not to go ahead with even higher tariffs on China, and Beijing agreed to buy more American products.
Trump is also agitated by America’s massive trade deficit with China, which came to USD 263 billion last year.
In Switzerland, Bessent and Greer also plan to meet with Swiss President Karin Keller-Sutter. Trump last month suspended plans to slap hefty 31 per cent tariffs on Swiss goods - more than the 20 per cent levies he plastered on exports from European Union. For now, he’s reduced those taxes to 10 per cent but could raise them again.
The government in Bern is taking a cautious approach. But it has warned of the impact on crucial Swiss industries like watches, coffee capsules, cheese and chocolate. “An increase in trade tensions is not in Switzerland's interests. Countermeasures against US tariff increases would entail costs for the Swiss economy, in particular by making imports from the USA more expensive,” the government said last week, adding that the executive branch “is therefore not planning to impose any countermeasures at the present time.” The government said Swiss exports to the United States on Saturday were subject to an additional 10 per cent tariff, and another 21 per cent beginning Wednesday.
The United States is Switzerland's second-biggest trading partner after the EU – a 27-member-country bloc that nearly surrounds the wealthy Alpine country of more than 9 million. US-Swiss trade in goods and services has quadrupled over the last two decades, the government said.
The Swiss government said Switzerland abolished all industrial tariffs on January 1 last year, meaning that 99 per cent of all goods from the United States can be imported into Switzerland duty-free.
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