Trump's trade officials to finally meet Chinese counterparts this week
What's the story
Senior trade officials from the United States of America and China are scheduled to meet this week in what will be their first in-person discussion since a trade war between them escalated in March.
Despite the high hopes, Treasury Secretary Scott Bessent has warned not to expect a big trade deal.
"My sense is that this will be about de-escalation, not about the big trade deal... but we've got to de-escalate before we can move forward," he told Fox News.
Economic impact
Tariffs have significantly impacted US-China trade relations
The US slapped a staggering 145% tariff on most Chinese imports, while China retaliated with 125% on select US goods.
This tit-for-tat escalation of tariffs has resulted in a sharp fall in trade between the two countries.
Businesses now have to either absorb the increased costs or stop sales altogether, which could lead to higher prices and shortages for consumers.
Economic consequences
Both economies have already felt the effects of tariffs
The US economy contracted for the first time in three years during Q1, as companies braced for Trump's "Liberation Day" tariffs.
China's factory activity also plunged sharply in April, triggering expectations of more stimulus from the government.
"The current tariff war isn't sustainable," said Bessent, "especially on the Chinese side. And, you know, 145 percent [tariffs], 125 percent, is the equivalent of an embargo. We don't want to decouple, what we want is fair trade."
Economic strain
Chinese Commerce Ministry confirms meeting
On Tuesday, the Chinese Commerce Ministry confirmed a meeting between its vice premier and Bessent.
"The Chinese side carefully evaluated the information from the US side and decided to agree to have contact with the US side after fully considering global expectations, Chinese interests and calls from US businesses and consumers," said a ministry spokesperson.
The spokesperson, however, emphasized that China would not "sacrifice its principles or global equity or justice in seeking any agreement."