The Trump administration is seeking to lower tariffs and make concessions on rare earths in US-China negotiations
The Trump administration plans to significantly reduce tariffs in the China-U.S. negotiations and seeks concessions on rare earths to ease trade tensions between the two countries. The initial goal is to cut the tariff rate to below 60% and encourage China to lift restrictions on rare earth exports. Both sides have also made positive progress on the fentanyl issue. Trump stated that if negotiations go smoothly, he may accept a reduction in tariffs. This meeting is expected to focus on mutual concerns, and it remains uncertain whether tariffs can be quickly reduced in the short term
According to media reports citing informed sources, the Trump administration is reportedly considering a significant reduction in tariffs during talks with China over the weekend, aimed at easing the ongoing tense trade situation between the U.S. and China and alleviating the economic pressures that have begun to emerge globally. The Trump administration is contemplating a substantial cut in tariffs and seeking concessions on rare earths, and the weekend discussions may signify an opportunity for a thaw in the tense trade relations between the U.S. and China.
According to media reports, informed sources indicated that the initial goal set by the Trump administration is to reduce the tariff rate on China to below 60%, with the U.S. believing that China may be willing to respond in kind.
Additionally, one of the key demands from the U.S. is to facilitate the lifting of China's export restrictions on rare earths used for manufacturing magnets, as multiple industries in the U.S. are facing operational difficulties due to limited rare earth supplies.
It is understood that earlier this year in April, the Chinese government implemented new restrictions on the export of six types of heavy rare earth elements—these metals are only refined in China, and the export scale of rare earth magnets is also restricted.
Statistical data shows that China produces about 90% of the world's rare earths; rare earths consist of 17 elements and are widely used in defense, electric vehicles, energy, and electronics industries.
Informed sources stated that both sides have also made positive progress on the fentanyl issue and may hold separate consultations soon to curb China's export of precursors used for synthesizing opioids.
U.S. President Donald Trump stated on Thursday local time that China is "very" eager to reach a trade agreement and mentioned that if the upcoming negotiations in Switzerland go smoothly, he "might" accept a reduction in tariffs on China.
Informed sources indicated that the upcoming U.S.-China talks are expected to focus on mutual concerns rather than immediately resolving the lengthy list of trade issues between the two countries, and they noted that the global trade situation remains volatile, making it uncertain whether tariffs can be quickly reduced in the short term. However, they stated that if the two-day talks yield more positive progress, tariffs could potentially begin to be reduced as early as next week.
"Tariffs have reached as high as 145%, and they will only go down," Trump said on Thursday. "I think we will have a good weekend with China."
U.S. Secretary of Commerce Howard Lutnick, in an interview with CNBC, stated that "easing tensions and adjusting tariffs to appropriate levels" is a common goal of the Besant and Chinese delegation, and the president is looking forward to this "good outcome."
News related to U.S.-China trade negotiations boosted the rebound of the three major U.S. stock index futures, while the S&P 500 index returned to the level before the comprehensive upgrade of tariff policies in early April, and Asian stock markets also strengthened on Friday.
Analysts generally believe that this preliminary U.S.-China trade negotiation is likely exploratory, with both sides having numerous grievances, and any agreement to reduce tariffs is merely the beginning of a long process to resolve trade differences.
Scott Kennedy, an expert on the Chinese economy and U.S.-China economic relations at the Center for Strategic and International Studies in Washington, stated that the two countries must find a way to coexist; otherwise, "trade decoupling" will severely impact the global economy and order, and this weekend is just "the first small step of a long march of ten thousand miles." Even with tariffs halved, the overall tariff rate in the United States still far exceeds historical levels. Bloomberg Economics' latest calculations show that the current tariff on China is as high as 145%, and the tariffs on a global scale have raised the average tariff rate in the U.S. by more than 20 percentage points to 23%; if the tariff rate on China falls back to the 34% announced on April 2, it would still be 12.6 percentage points higher than at the beginning of the year, marking the largest increase since 1930
