Trade tensions between the United States and international partners saw major developments as the Trump administration juggled tariff adjustments, pending executive orders, and trade deal approvals involving China and Switzerland.
International trade policy shifted rapidly as the Trump administration balanced negotiations across multiple fronts. While announcements from Washington addressed tariff reductions with major economic partners, simultaneous discussions continued regarding trade deficits.
U.S. and China Establish Tariff Reductions and Fentanyl Discussion Mechanism
US president Donald Trump maintained his confidence in the US-China trade deal while holding a press conference Monday (May 12) morning with secretary of health and human services Robert F. Kennedy Jr.
While the press conference was for Trump to sign an executive order slashing US prescription drug and pharmaceutical prices, he also used the opportunity to answer some questions from the media about the current state of the trade war. As reported by Undercurrent News, the US will reduce its tariffs on Chinese goods from 145% to 30%, effective May 14. As part of the deal, China will lower its tariffs on American imports from 125% to 10%. However, this reduction in tariffs is just for a 90-day period.
When asked if the US can expect tariffs to go back up to 145% if a longer-term deal is not made with China, Trump said, no, but they would go up substantially higher.
I think you will have a deal, however,
Trump said.
The White House previously said that once the changes come into effect, both nations will continue the important discussions about trade and economics.
Per a joint statement released Monday, these discussions may be conducted alternately in China and the United States, or a third country upon agreement of the Parties.
In a separate interview on CNBC’s “Squawk Box” Monday, treasury secretary Scott Bessent said he expected to meet with Chinese officials again in the coming weeks to continue trade negotiations.
I would imagine in the next few weeks we will be meeting again to get rolling on a more fulsome agreement,
Bessent said.
The exact details of the meeting, such as location, have not been set, but there is now a “mechanism” for further talks, he said.
What we have with the Chinese is a mechanism to avoid upward tariff pressure,
Bessent said Monday.
Baked into the math behind the remaining US 30% tariff on Chinese goods is the 20% fentanyl-related tariff, he clarified. Bessent said there was a very long and in-depth sidebar
regarding fentanyl between officials at the meeting.
I think that we saw here in Geneva that the Chinese are now serious about assisting the US in stopping the flow of precursor drugs,
he said.
During a press conference at the White House, President Donald Trump discussed the current state of international trade while signing an executive order aimed at slashing U.S. prescription drug and pharmaceutical prices. The administration confirmed that the U.S. will reduce its tariffs on Chinese goods from 145% to 30%, effective May 14. In reciprocity, China will lower its tariffs on American imports from 125% to 10% for an initial 90-day period.
When questioned about whether tariffs would revert if a long-term agreement fails to materialize, Undercurrentnews reported that duties would not return to the previous peak, though they would increase substantially. Treasury Secretary Scott Bessent corroborated expectations for future progress, stating that officials plan to convene in the coming weeks to establish a comprehensive pact.
Bessent added that the remaining 30% U.S. tariff includes a 20% fentanyl-related levy. He noted that bilateral talks in Geneva included substantial discussions regarding Beijing’s cooperation in curbing the flow of precursor drugs.
Swiss Trade Deal Awaits White House Approval Following Positive Talks
A trade deal between the US and Switzerland is awaiting approval from the White House following talks on Thursday that a senior Trump administration official characterized as positive.
The official, who briefed reporters on condition of anonymity, said Swiss negotiators acknowledged the need to reduce or eliminate Switzerland’s trade deficit with the US, a key concern for the Trump administration. The official added that the Swiss also presented plans for reducing the deficit.
Beyond negotiations in Asia, European economic relations advanced as a bilateral trade agreement between the United States and Switzerland moved closer to formal enactment. Following discussions held on a Thursday, a senior administration official characterized the dialogue as positive, noting that Swiss negotiators acknowledged the necessity of addressing the bilateral trade deficit.
The pact now sits awaiting final approval from the White House. Swiss representatives presented plans detailing how they plan to reduce or eliminate the trade deficit with Washington, satisfying a core concern of the Trump administration.
Next Steps in Global Economic Diplomacy
With framework agreements established and executive actions moving forward, market participants and international trade officials await the implementation dates for the newly negotiated tariff structures. Treasury officials plan to schedule subsequent rounds of talks to solidify long-term arrangements before the expiration of interim grace periods.
