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US President Donald Trump on Friday said that regardless of its trade deals with other nations, the US would maintain a 10% baseline tariff, unless an “exceptional” offer was made.
The same day, he suggested lowering tariffs on China from the current 145% to 80% without elaborating on any logic behind the figure. White House press secretary Karoline Leavitt said that Treasury Secretary Scott Bessent would lead the negotiation, leaving the door open for virtually any outcome.
After weeks of speculation, the US and China are holding talks on Saturday in Switzerland to discuss lowering the 145% US tariffs currently in place on Chinese imports. The US and China annually trade in goods worth nearly $700 billion. According to a Bloomberg report, the tariff announcement has already impacted Chinese manufacturing, causing a slowdown and a pivot to other export markets.
This has drastically disrupted supply chains worldwide, especially in the US. Major American ports have begun to witness a decline in shipments, with tracking data showing a 33% decline in the number of vessels scheduled to arrive at the Los Angeles port last week, compared to last year. Meanwhile, importers could be sitting on goods at ports of origin and destination, or seeking alternative routes and frontloading deliveries from manufacturing hubs like Vietnam and Cambodia, which currently enjoy a 90-day tariff reprieve.
However, Chinese exports had grown sharply in April, according to customs data released on Friday. Chinese exports had grown 8.1% in dollar terms over the last year, while imports shrank 0.2% in April, both adding to its trade surplus with the US.
As explained in our latest China tracker, the likely outcome would be a reduction in US tariffs, even though a drastic reduction may be unlikely.
European contingencies for talks
On Thursday, the European Commission (the European Union’s decision-making body on trade) announced retaliatory tariffs worth €100 billion of US exports, effective if its upcoming talks with the US fail. The products targeted include industrial goods such as Boeing aircraft, American-made cars, and bourbon, which had been removed from a previous list. The new list, according to Bloomberg reporting, will be discussed extensively in intra-union negotiations over the next month and may see changes.
Currently, the EU faces 25% tariffs on exports of cars and metals, as well as 10% ‘retaliatory’ tariffs on all exports for almost all other goods. If the US does not agree to a trade deal with the EU, these tariffs could rise to 20% once the 90-day pause announced by Trump ends in July. According to the Commission, US tariffs currently cover €380 billion, around 70% of EU’s goods trade to the US, and could swell to 97% once the US announces further levies on pharmaceuticals, semiconductors, critical minerals and trucks
The EU last month approved a first round of retaliatory tariffs of around 25% on American imports, worth €21 billion. The latest countermeasure would add to this, even as the bloc insists it favours a negotiated solution.
European Commission President Ursula von der Leyen said the EU “remains fully committed to finding negotiated outcomes with the US” but would “ continue preparing for all possibilities.” Trump, who has long maintained that the EU was formed to “screw” the US, responded to this announcement Thursday by calling von der Leyen “so fantastic” and said that the bloc was desperate for a trade deal with the US.
EC Vice President Stéphane Séjourné told Bloomberg that the EU is taking steps to lower internal trade barriers within the bloc to counter Trump’s tariff burdens on automotives and metals and boost European productivity. Describing the move as ‘Choosing Europe’, he called the move towards protectionism inevitable given the tariffs in place.
Sejourne also said that industrial favouritism for the continent could be likely as the EU looks “to respond to businesses with very concrete measures regarding permits, administrative speed, and simplification”. This would counter American efforts to attract production to the US.
