Much-anticipated trade talks with China are set to begin this weekend, but signals from both the Trump administration and Beijing have tempered hopes for a far-reaching deal anytime soon.
Yet hope remains that some sort of quick tariff deescalation could be in the offing to jump-start the formal talks likely to stretch throughout the year.
“My sense is that this [weekend’s talks] will be about deescalation, not about the big trade deal,” Treasury Secretary Scott Bessent said in a Fox News appearance Tuesday, adding “we’ve got to deescalate before we can move forward.”
The talks are set for this weekend, according to Bessent. The Treasury secretary, US Trade Representative Jamieson Greer, and Chinese Vice Premier He Lifeng will all travel to Switzerland, according to a trio of announcements.
“China is open to dialogue, but for any dialogue to happen, it must be based on equality, respect, and mutual benefit,” a spokesperson for China’s Foreign Ministry added.
The talks come after a weeks-long diplomatic dance in which both sides have tried to position the other as more in need of a deal, leading to questions about what precisely will be on the table this weekend.
“Investors shouldn’t mistake China engagement with China deals,” Pangaea Policy’s Terry Haines said.
“This can’t go quickly, because China can’t move quickly,” he added, suggesting that any outsized optimism could be “yet another example of markets getting way over their skis.”
Andrew Bishop of Signum Global Advisors added that “hope for prompt tariff relief (i.e. within weeks) hinges on Presidents Trump and Xi agreeing to mutual de-escalation ahead of longer trade negotiations.”
Read more: The latest news and updates on Trump’s tariffs
Another reason for tempering expectations is rhetoric from President Trump, who has offered a series of comments in recent days suggesting he is fine with not reaching a compromise.
“We don’t have to sign deals,” he said during an appearance Tuesday with Canadian Prime Minister Mark Carney, suggesting he may be more inclined to simply dictate the terms.
He also said during that appearance that the US is “losing nothing” by not trading with Beijing.
Bessent offered a similar message on Fox when he was asked about the chances that this weekend’s talks could result in a drop of current tariffs on goods from China (currently as high as 145%) to something like 50%.
“Look, everything’s on the table,” Bessent said of China, before immediately adding, “At the end of the day, the president has said that he’s happy just to give all countries a number if the negotiations don’t go well.”
