By Brian Schwartz and Lingling Wei
GENEVA -- President Trump dispatched top economic aides to talk with their Chinese counterparts this weekend, setting the stage for a potential thawing of trade relations between the world's two largest economies.
Here's what to watch:
When are the talks?
Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer are scheduled to meet with their China counterparts here Saturday, with a second gathering set for Sunday.
Will tariffs go down?
Trump has opened the door for lower tariffs. He said this week that they couldn't get much higher than the current 145%, so that it was likely they would eventually come down. And Friday, he suggested lowering tariffs to 80%.
"He said that an 80% number may sound good to him but again, he's in constant contact with our secretary of Treasury who will be leading his negotiation this weekend," White House press secretary Karoline Leavitt said without further explanation on how he arrived at the figure.
Some administration officials are viewing Trump's 80% idea as a public message to encourage Bessent to try to get closer to completing an arrangement that would lower China's tariff rate to around 80%, according to a person familiar with the matter.
On Friday night, Commerce Secretary Howard Lutnick told Fox News that the president is expected to keep significant so-called reciprocal tariffs on trade with China, but may settle near 34%, which is the rate Trump announced on April 2.
What might the U.S. get out of China?
Trump has said he wants a fairer trade with Beijing -- the president has often criticized China's manufacturing power -- and that he wants to curb its role in fentanyl trafficking into the U.S. It is likely the U.S. would want to see some commitments from China on either front before lowering tariffs.
The Wall Street Journal reported that China's earlier outreach to the Trump administration on how to address his concerns over the fentanyl crisis helped pave the way for the weekend talks. The White House has given Beijing a list of suggestions on how China can crack down on trafficking of the chemicals used to make fentanyl. The Chinese delegation to Switzerland is expected to address the specific demands from the administration.
If both sides reach an agreement on fentanyl, that could lead to a rollback of some U.S. tariffs on Chinese goods.
Beijing is also considering proposing more Chinese purchases of American products and making more investment in the U.S., according to people who consult with Chinese officials. But substantive discussions over a potential trade agreement between the two countries aren't likely to be conducted in Switzerland this weekend, the people said.
Why might China want a deal?
Chinese leader Xi Jinping is preparing the country for prolonged competition against the U.S. However, the continuing trade war has led to factories across China suspending production and putting workers on leave, threatening to weaken an already sluggish Chinese economy.
To alleviate the pain, Xi has decided to dispatch his top aides to Switzerland for talks with the Americans. Notably, in addition to his economic right-hand man, He Lifeng, Xi's public-security minister, Wang Xiaohong, is also part of the Chinese entourage, according to people familiar with the matter.
Does China have any leverage?
China currently dominates global supply of many critical minerals and holds a near monopoly on the rare-earths industry, serving as the world's leading miner, refiner and producer of rare-earth magnets -- essential components in a range of military and civilian technologies, including electric vehicles.
Analysts expect Beijing to leverage its dominance and export control over critical minerals -- particularly rare earths -- as a bargaining chip in trade negotiations with the U.S.
The Chinese team led by He, Xi's economic czar and a Chinese vice premier, is expected to present its proposal on how the two sides can de-escalate current trade tensions. Beijing has said Washington should remove all of the 145% tariffs imposed on Chinese goods.
What role will the Swiss play?
Swiss officials aren't missing the opportunity to work on deals with China and the U.S. while government advisers from both countries visit Geneva.
Swiss President Karin Keller-Sutter told reporters on Friday in Geneva that officials from China and her country held talks about a new free-trade agreement. Keller-Sutter also said that in her meetings with Bessent and Greer, U.S. officials indicated a deal could be in its final stages in a matter of weeks.
Write to Brian Schwartz at brian.schwartz@wsj.com and Lingling Wei at Lingling.Wei@wsj.com
(END) Dow Jones Newswires
May 09, 2025 23:00 ET (03:00 GMT)
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