United States And China Suspend Tariffs, But No Deal For Canada Yet
In the first high-level trade discussions between the two countries since President Donald Trump introduced 145 percent tariffs on Chinese goods and China retaliated with its own duties, officials from the two countries met. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer led the talks, which occurred over the week in Switzerland, for the United States. Vice Premier He Lifeng led negotiations for China.
On Saturday, neither negotiating party revealed much about what talks have entailed, but the on Sunday evening they announced a breakthrough: the United States had agreed to lower its tariff rate on Chinese imports from 145 percent to 30 percent. China agreed to lower its tariff rate from 125 percent to 10 percent. (The United States will retain all duties imposed on China prior to April 2, 2025, including Section 301 tariffs, Section 232 tariffs on steel and aluminum, and tariffs imposed in response to the fentanyl national emergency invoked pursuant to the International Emergency Economic Powers Act, and Most Favored Nation tariffs.)
The White House issued a fact sheet providing a summary of the agreement. Click this link to access it.
The changes will be in effect for 90 days, giving the two parties more time to discuss a trade deal. “We want more balanced trade. And I think that both sides are committed to achieving that,” Secretary Scott Bessent said at a joint press conference. “We would like to see, China open to more U.S. goods. We expect that as a negotiation to proceed.” The countries’ joint statement said the United States and China will “establish a mechanism to continue discussions about economic and trade relations” that will be led by China’s Vice Premier He Lifeng, Secretary Bessent, and Ambassador Jamieson Greer.
Earlier in the week, President Trump met himself with another foreign leader hoping to reach a trade deal with the United States: Canadian Prime Minister Mark Carney. Here, it seems, there was little progress. More specifically, it does not seem the United States is backing down on tariffs on Canadian goods, including for steel and aluminum products. (As a reminder, readers can find the Metals Service Center Institute’s position on Section 232 tariffs on industrial metals products at this link.) After meeting with Prime Minister Carney, President Trump suggested there was very little Prime Minister Carney could do to convince him to reduce tariffs on Canadian goods. “No,” President Trump said. “Just the way it is.”
Regarding the United States, Mexico, Canada Agreement (USMCA), which will need to be renegotiated this year, President Trump suggested it may not be necessary anymore. “It’s still very effective, but people have to follow it,” the president said. “It was a transitional step, a little bit. As you know, it terminates fairly shortly. It gets renegotiated very shortly.”
President Trump and Prime Minister Carney are next set to meet at a G7 meeting in June.
A few days after the meeting, Canada’s National Post reported that U.S. Ambassador to Canada Pete Hoekstra said President Trump is evaluating different “concepts” for a trade deal that include keeping the USMCA as a three-party, North American deal or eliminating Mexico from the agreement.
Representing Canada, Ambassador to the United States Kirsten Hillman said that while her government is eager to eliminate U.S. tariffs on Canadian goods, Prime Minister Carney will not agree to a deal that sacrifices “stability and a fair arrangement” for various industries. “It would be great to do it as soon as possible, but not at the expense of getting a deal that is not going to bring us back to a place where we are able to maintain the strength of some of these core sectors that have been affected by these tariffs,” the ambassador said. Read more from The Globe and Mail.