Trump floats China tariff cut

Donald Trump has floated the idea of cutting US trade tariffs against China to 80% - as key peace talks between the sides prepare to get under way.

The weekend meeting, involving top officials from both nations in Switzerland, is seen as an opportunity to ease the most damaging and punitive element of the trade war. At stake for both sides is not only a deteriorating domestic outlook but a weakening global economy.

Writing on his Truth Social platform, hours after agreeing an interim deal with the UK, the president said: "80% Tariff on China seems right! Up to Scott B [Bessent]." Money latest: £2,000 water bills loom, Ofwat warns It means the decision will lie with Scott Bessent - the US treasury secretary who will lead the US delegation at the talks in Geneva. The outcome is eagerly awaited after several rounds of tariff hikes that currently total duties of 125% on US imports to China and 145% on Chinese goods arriving in America.

Both levels amount to an effective trade embargo, given the severity of the numbers. A 80% figure against China would remain hugely restrictive.

But the announcement of talks in Switzerland this week has been welcomed broadly - across financial markets too, with the dollar and global stocks rising on Friday in hopeful anticipation of a cooling in the trade hostilities between the world's two largest economies. Investors are not only concerned by higher, if not extortionate, prices but also the impact on supply.

The effects are being felt in both economies already. Fears of a trade war effectively meant that the US economy contracted during the first three months of the year, while the US central bank has held off on interest rate cuts on the grounds that tariffs applied to imports by the Trump administration globally will lift inflation markedly.

Official data out of China is yet to show any obvious pain, but surveys suggest factory orders are tumbling. The fact that China is suffering was borne out on Wednesday when the country's central bank cut interest rates and reduced bank reserve requirements to help free up more funding for lending.

The authorities also agreed wider borrowing facilities to help manufacturers. Read more:China moves to ease tariff pain as trade war talks nearUS-UK trade pact neither a free-trade agreement or broad trade deal It will be hoped that bolstering activity in the economy will help lift prices generally, as China continues to battle deflation.

Officially, China has signalled that it wants the US to make the first concession. Its delegation in Geneva is led by vice premier He Lifeng - a figure within China who has gained an international reputation as an effective negotiator.

A commerce ministry spokesperson said of the prospects for a breakthrough when confirming the talks: "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." White House economic adviser Kevin Hassett told Sky's US partner CNBC on Friday: "Everything that's been going on with the meeting in Switzerland is very promising to us. "We're seeing extreme respect, treating both sides with respect.

We're seeing collegiality and also sketches of positive developments.".