In the next step, the USA and China will continue negotiations regarding tariffs. Secondly, the focus of the negotiations between the USA and China will shift to non-tariff barriers; discussions will begin around investment, market access, and the supply of key minerals. Finally, considering the significant reduction of tariffs by the USA on China, China's foreign trade may show more positive performance in May.
On May 12, a joint statement was issued regarding the Geneva trade talks between China and the USA. A spokesperson for the Ministry of Commerce stated that this high-level economic and trade meeting between China and the USA made substantial progress, significantly reducing the bilateral tariff levels. This measure meets the expectations of producers and consumers in both countries, and aligns with the interests of both countries and the common global interest. Experts interviewed by the Global Times indicated that the meeting achieved substantial outcomes, exceeding expectations. However, a cautiously optimistic attitude should be maintained as sustained negotiations on tariffs will continue between China and the USA.
According to news from the Ministry of Commerce's official website, the USA committed to canceling 91% of the tariffs imposed on Chinese commodities based on the administrative orders number 14259 issued on April 8, 2025, and number 14266 issued on April 9, 2025, as well as modifying the 34% reciprocal tariffs imposed on Chinese commodities based on the administrative order number 14257 issued on April 2, 2025, with 24% of those tariffs being suspended for 90 days, while retaining the remaining 10% of tariffs. Correspondingly, China will cancel a total of 91% of the countermeasures against American commodities; for the 34% counter-tariffs corresponding to the USA's reciprocal tariffs, 24% of those will be suspended for 90 days, with the remaining 10% retained. China will also suspend or cancel relevant non-tariff countermeasures against the USA. Both parties agreed to establish a consultation mechanism for economic and trade issues, maintaining close communication on respective concerns in the economic and trade fields and conducting further consultations.
Song Guoyou, deputy director of the US Studies Center at Fudan University, stated in an interview with the Global Times on the 12th that, from the statement, the results of the talks exceeded expectations and are 'substantial' outcomes, reflecting the positive results of China’s countermeasures against the USA. Compared to before, this tariff has been greatly reduced, and the USA is effectively only imposing a 10% baseline tariff similar to most countries on China, which is beneficial for normalizing Sino-US trade. However, the USA still retains unfair unilateral tariffs against China that need to be addressed in subsequent Sino-US talks.
‘The results of the statement meeting are better than market expectations.’ Huang Zhengliang, director of the New Industrialization Research Center of the Industrial Economic Research Institute at the Ministry of Industry and Information Technology, told the Global Times reporter on the 12th. The significant reduction of tariffs occurred in the first talks between China and the USA, and both parties reached a consultation mechanism, indicating that the results are clearly better than market expectations. Huang Zhengliang particularly noted that the pressure is greater on the USA than on China. In mid-May, the USA is set to announce multiple economic indices such as prices, manufacturing, and import prices, coupled with the consumption of USA product inventories, making the high tariffs a greater pressure on the USA economy. The USA needs to timely reduce tariffs, restore trade, and alleviate pressures on economic development and commodity inventories.
However, some scholars caution to maintain a cautious optimism. Gao Lingyun, a researcher at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, told the Global Times reporter on the 12th that the current tariffs still represent a considerable burden for enterprises and consumers, but it is positive that both sides have agreed to establish a consultation mechanism for economic and trade issues, allowing for continued negotiations.
Scholar Yang Shu Qing from the Academy of Social Sciences told the Global Times reporter that one should not overlook the mid-to-long term risks of industry tariffs. The US government is currently conducting 'Section 232 investigations' targeting Semiconductors, Pharmaceuticals, Autos, and critical minerals, which are strategic industries, and their tariffs may increase.
What will be the next developments in the China-US economic and trade consultations? Huang Zhengliang analyzed that, firstly, the next steps will continue negotiations on tariffs. Secondly, the focus of the China-US negotiations will shift to non-tariff barriers, and negotiations will be initiated on investment, market access, and the supply of critical minerals; finally, considering the significant reduction in tariffs by the USA on China, China's foreign trade may see a more positive performance in May.
The statement indicated that both parties will establish a mechanism to continue consultations on economic and trade relations. Consultations can take place in China, the USA, or a third country agreed upon by both parties. As needed, both sides may conduct working-level discussions on relevant economic and trade issues.
Editor/Somer
