Cliff Notes
- China has introduced measures to support its Economy amid the escalating trade war with the US, coinciding with fresh peace talks scheduled for the weekend.
- Tariffs on Chinese goods have reached 145% in the US, while China has imposed 125% tariffs, straining both countries’ economies and affecting business sentiment.
- A coordinated stimulus effort from China includes plans to cut interest rates and reduce bank reserve requirements to encourage lending and combat deflation.
Trade war: China moves to ease tariff pain ahead of US peace talks | Money News
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China has revealed a series of measures designed to help its economy navigate the effects of the escalating trade war with the United States, hours after exploratory peace talks were announced.
Senior officials from both sides are to meet in Switzerland this weekend for what are understood to be the first face-to-face meeting between the world’s two largest economies in months.
The Trump administration has raised tariffs on Chinese goods to 145% while Beijing has responded with levies of 125% in recent weeks.
The effects are starting to be felt in both countries in respect of price, supply and business sentiment.
China’s export-dominated economy is showing strain in terms of factory order books while official figures recently revealed that the US economy contracted between January and March.
US Treasury secretary Scott Bessent and Chinese vice premier He Lifeng will lead their respective delegations.
President Trump had previously suggested that any talks would look to lower tariffs but China has demanded the US moves first.
A commerce ministry spokesperson said: “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.”
Commentators said it was impossible to know what could be achieved at the talks in Geneva but cautioned that any meaningful truce would take months to fully iron out.
Official Chinese economic data is yet to show the extent of the harm the trade war is causing but a coordinated stimulus effort was revealed by the authorities on Wednesday.
Officials from the country’s central bank outlined plans to cut interest rates and reduce bank reserve requirements to help free up more funding for lending.
It will be hoped that bolstering activity in the economy will help lift prices generally as the country battles deflation.
Other help included government funding for factory upgrades.