China and US begin diplomatic dance in restarting trade talks

SHENZHEN/CHONGQING – China and the United States are finally ready to talk trade, after weeks of tough posturing aimed at strengthening their hand ahead of what analysts expect to be protracted negotiations over tariffs.

Chinese Vice-Premier and economic czar He Lifeng will meet US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer this week in Switzerland, officials from both countries said on May 7.

This will be the first publicly known trade talks between both sides since the US ratcheted up tariffs on Chinese goods in April.

Both sides are coming to the table as punishingly high tariffs inflict pain on the world’s two largest economies. Analysts tell The Straits Times that both sides need a deal: China to protect jobs and factory activity, and the US to combat rising prices.

Still, this is only the beginning of what is expected to be a long-drawn process, given their deep underlying differences.

“I think both sides concluded that at this point, discussions could be commenced without creating the appearance of capitulation on either side,” said former US trade negotiator Stephen Olson.

The US and China engaged in a show of strength in April, each hitting back in a series of retaliatory tariffs that brought Washington’s additional levies on Chinese imports to 145 per cent, and Beijing’s to 125 per cent.

“Both countries are feeling pressure to provide a bit of reassurance to increasingly nervous markets, businesses and domestic constituencies,” added the senior visiting fellow at the ISEAS – Yusof Ishak Institute in Singapore.

Investors turned optimistic that officials on both sides are attempting to cool their trade tensions. The Dow Jones Industrial Average rose 0.4 per cent while the Nasdaq Composite was up 0.2 per cent soon after opening.

Unlike many other countries that rushed to negotiate with the