China and the United States announced they will meet next weekend in Switzerland to lay the groundwork for trade negotiations, for the first time since Donald Trump imposed outrageous customs duties on Chinese products and Beijing responded.
At the same time, the Chinese central bank announced a series of measures to support the country's economy, which is threatened by the trade war with Washington and sluggish domestic consumption.
China "will not sacrifice its position of principle" and "will uphold justice" during this meeting between its Vice Premier He Lifeng, US Treasury Secretary Scott Besant and US Trade Representative Jamieson Greer, the Chinese Ministry of Commerce warned today.
“If the United States wants to resolve the issue through negotiations, it must face the serious negative impact on itself and the world from its unilateral tariffs,” He added in a statement. “If the United States talks one way and acts another or (…) if it attempts to continue to coerce and blackmail China under the pretext of talks, China will never agree.”
"I am eager to hold productive talks aimed at restoring balance to the international economic system to better serve the interests of the United States," Bessant stressed in a statement.
The two sides will meet on Saturday and Sunday to lay the groundwork for future negotiations, he said in an interview with Fox News on Tuesday. “I expect we’ll be talking about de-escalation, not a big trade deal,” he predicted. “We need de-escalation before we can move forward.”
To support an economy burdened by sluggish consumption and the trade war with the United States, Beijing also announced today the reduction of a significant interest rate, as well as the amount of banks' required reserves to facilitate credit.
"The reserve requirement ratio will be reduced by 0,5 percentage point," said Pan Gongsheng, governor of the People's Bank of China, at a press conference. He added that the rate on reverse repos with a maturity of seven days will also be reduced from 1,5% to 1,4%.
The economic announcements continued with a reduction in lending rates for first-time homebuyers. The interest rate for first-time homebuyers with a loan term of more than five years will be reduced from 2,85% to 2,6%, Pan Gongsheng said.
After Donald Trump returned to the White House in January, his administration imposed new customs duties totaling 145% on goods originating from China, to which sectoral measures are added.
Beijing responded by imposing 125% tariffs on US imports into China, as well as more targeted measures.
These levels are considered unbearable by most economists, to the point that the United States and China, as well as countries beyond them, are threatened with recession and possibly a large increase in prices.
"They cannot be supported (…), especially by the Chinese side," the US Treasury Secretary estimated. "145% and 125%, they are equivalent to an embargo."
The negotiations on May 10 and 11 will be a first formal public commitment by the world's two largest economies to resolve this trade war.
Source: protothema.gr
