China Correspondent<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n The US-China trade war could be letting up, with the world’s two largest economies set to begin talks in Switzerland. <\/p>\n Top trade officials from both sides will meet on Saturday<\/a> in the first high-level meeting since US President Donald Trump hit China with tariffs in January. <\/p>\n Beijing retaliated immediately and a tense stand-off ensued as the two countries heaped levies on each other. Those now stand at 125%, although some Chinese imports to the US face duties as high as 245%. <\/p>\n There have been weeks of stern, and sometimes fiery, rhetoric where each side sought to paint the other as the more desperate party. <\/p>\n And yet this weekend they will face each other over the negotiating table. <\/p>\n So why now?<\/p>\n<\/div>\n Despite multiple rounds of tit-for-tat tariffs, both sides have been sending signals that they want to break the deadlock. Except it wasn’t clear who would blink first. <\/p>\n “Neither side wants to appear to be backing down,” said Stephen Olson, senior visiting fellow at Singapore’s ISEAS-Yusof Ishak Institute and a former US trade negotiator. <\/p>\n “The talks are taking place now because both countries have judged that they can move forward without appearing to have caved in to the other side.”<\/p>\n Still, China’s foreign ministry spokesperson Lin Jian emphasised on Wednesday that “the talks are being held at the request of the US”. <\/p>\n And the commerce ministry framed it as a favour to Washington, saying it was answering the “calls of US businesses and consumers”.<\/p>\n The Trump administration, however, claims it’s Chinese officials who “want to do business very much” because “their economy is collapsing”.<\/p>\n “They said we initiated? Well, I think they ought to go back and study their files,” Trump said at the White House on Wednesday.<\/p>\n<\/div>\n But as the talks drew closer, the president struck a more diplomatic note: “We can all play games. Who made the first call, who didn’t make the – it doesn’t matter,” he told reporters on Thursday. “It only matters what happens in that room.”<\/p>\n The timing is also key for Beijing because it’s during Xi’s visit to Moscow. He was a guest of honour on Friday at Moscow’s Victory Day parade to commemorate the 80th anniversary of the World War Two victory over Nazi Germany. <\/p>\n Xi stood alongside leaders from across the Global South – a reminder to Trump’s administration that China not only has other options for trade, but it is also presenting itself as an alternative global leader.<\/p>\n This allows Beijing to project strength even as it heads to the negotiating table.<\/p>\n<\/div>\n Trump insists that the tariffs will make America stronger, and Beijing has vowed to “fight till the end”- but the fact is the levies are hurting both countries. <\/p>\n Factory output in China has taken a hit, according to government data. Manufacturing activity in April dipped to the lowest level since December 2023. And a survey by news outlet Caixin this week showed that services activity has reached a seven-month low.<\/p>\n The BBC found that Chinese exporters have been reeling from the steep tariffs, with stock piling up in warehouses<\/a>, even as they strike a defiant note and look for markets beyond the US. <\/a><\/p>\n “I think [China] realises that a deal is better than no deal,” says Bert Hofman, a professor at the East Asian Institute in National University Singapore. <\/p>\n “So they’ve taken a pragmatic view and said, ‘OK, well we need to get these talks going.'”<\/p>\n And so with the major May Day holiday in China over, officials in Beijing have decided the time is right to talk.<\/p>\n On the other side, the uncertainty caused by tariffs led to the US economy contracting for the first time in three years. <\/p>\n And industries that have long depended on Chinese-made goods are especially worried. A Los Angeles toy company owner told the BBC<\/a> that they were “looking at the total implosion of the supply chain”.<\/p>\n<\/div>\n Trump himself has acknowledged that US consumers will feel the sting<\/a>.<\/p>\n American children may “have two dolls instead of 30 dolls”, he said at a cabinet meeting this month, “and maybe the two dolls will cost a couple bucks more than they would normally”. <\/p>\n Trump’s approval ratings have also slid over fears of inflation and a possible recession, with more than 60% of Americans saying he was focusing too much on tariffs.<\/p>\n “Both countries are feeling pressure to provide a bit of reassurance to increasingly nervous markets, businesses, and domestic constituencies,” Mr Olson says. <\/p>\n “A couple of days of meetings in Geneva will serve that purpose.”<\/p>\n<\/div>\n While the talks have been met with optimism, a deal may take a while to materialise.<\/p>\n The talks will mostly be about “touching base”, Mr Hofman said, adding that this could look like an “exchange of positions” and, if things go well, “an agenda [will be] set for future talks”.<\/p>\n The negotiations on the whole are expected to take months, much like what happened during Trump’s first term.<\/p>\n After nearly two years of tit-for-tat tariffs, the US and China signed a “phase one” deal in early 2020 to suspend or reduce some levies. Even then, it did not include thornier issues<\/a>, such as Chinese government subsidies for key industries or a timeline for scrapping the remaining tariffs. <\/p>\n In fact, many of them stayed in place through Joe Biden’s presidency, and Trump’s latest tariffs add to those older levies. <\/p>\n What could emerge this time is a “phase one deal on steroids”, Mr Olson said: that is, it would go beyond the earlier deal and try to address flashpoints. There are many, from the illegal fentanyl trade which Washington wants China to crack down harder<\/a> on to Beijing’s relationship with Moscow. <\/p>\n But all of that is far down the line, experts warn. <\/p>\n “The systemic frictions that bedevil the US-China trade relationship will not be solved any time soon,” Mr Olson adds.<\/p>\n “Geneva will only produce anodyne statements about ‘frank dialogues’ and the desire to keep talking.”<\/p>\n<\/div>\n<\/div>\nSaving face<\/h2>\n<\/p>\n
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Getty Images<\/span><\/div>\n<\/div>\nThe pressure is on <\/h2>\n<\/p>\n
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BBC\/Xiqing Wang<\/span><\/div>\n<\/div>\nWhat happens next?<\/h2>\n<\/p>\n