President Donald Trump confirmed on May 7, that he will not reduce the 145% tariffs on Chinese imports during upcoming trade negotiations with Beijing.

When asked at the White House if he would ease the tariffs to promote discussions, Trump responded with a firm “no.”

The comments came ahead of a scheduled meeting between US Treasury Secretary Scott Bessent and his Chinese counterpart in Switzerland.

China said earlier that the US had requested the meeting and reiterated its strong opposition to the tariff increases.

When asked about expectations for the talks, Trump said, “We’ll see … we were losing a trillion dollars a year, now we’re not losing anything, you know? It’s the way I look at it.”

🔗 Source: CNBC

🧠 Food for thought

1️⃣ The scale of current US-China tariffs is unprecedented in modern trade history

Trump’s tariffs represent the most aggressive trade action against China in contemporary history, far exceeding previous trade disputes between the nations.

The current average effective tariff rate is projected to reach 11.1%, the highest level since 1943, marking a dramatic shift from decades of gradually liberalizing trade policy 1.

For context, the 2024 bilateral trade was valued at $582.4 billion, with Chinese imports to the US at $438.9 billion, creating a significant economic impact zone for these tariffs 2.

Economic projections suggest these tariffs could reduce long-run US GDP by 0.8%, potentially eliminating 664,000 American jobs, despite generating approximately $2.1 trillion in federal revenue over the next decade 1.

The severity of these measures stands in stark contrast to the carefully calibrated trade relationship that developed after Nixon’s 1972 visit and formal diplomatic recognition in 1979, which had gradually evolved toward deeper economic integration.

2️⃣ Business disruption has already reached critical levels

Supply chain executives report significant damage is occurring across multiple industries, with widespread order cancellations and production halts directly attributed to the tariff policy.

Many US businesses, particularly in furniture and apparel sectors, have significantly reduced or ceased placing orders from China as the tariffs have made Chinese sourcing economically unfeasible 3.