Trump’s team is finally meeting with China. The future of the global economy is riding on its success

Trump’s top trade officials will meet in Switzerland this week with China to discuss a de-escalation. The future of the global economy is riding on their success.

Trump’s top trade officials will meet with their Chinese counterparts this week to discuss a de-escalation of their increasingly ugly and damaging trade war. The future of the global economy is riding on their success. The trade talks, the first in-person meeting between Chinese and American officials since the tit-for-tat tariff escalation kicked off in earnest in March, are unlikely to result in a trade deal, Treasury Secretary Scott Bessent said Tuesday. But tariffs have reached such a high level that trade between the two countries has dropped off dramatically. Any thaw in the trade war could be a welcome sign for businesses and consumers in both countries and around the globe. The United States has placed at least a 145% tariff on most Chinese imports, and China has responded with a 125% tariff on some US imports. The last tariff-free ships — those on the water when the tariffs were announced — have almost all docked, and the first ships with goods that will be subject to tariffs are arriving at the ports. That means businesses in China and the United States will soon face a difficult decision: pay a tariff that more than doubles the cost of the imported goods or stop selling them altogether. That means consumers are weeks away from experiencing higher prices and some shortages. The punishing tariffs have already damaged both economies. The US economy went into reverse in the first quarter, its first contraction in three years, as businesses stockpiled goods in anticipation of Trump’s “Liberation Day” tariffs, which began in the second quarter. Meanwhile, China’s factory activity contracted at its fastest pace in 16 months in April, and the government is expected to inject the economy with another round of stimulus to support it. Although the China-US trade standoff is by far the most aggressive, Trump has imposed large tariffs on most other countries around the world too: a 10% universal tariff on virtually all goods entering the United States, plus 25% tariffs on steel, aluminum, autos, auto parts and some goods from Mexico and Canada. So the world is watching the talks with anticipation.