Trump team meets China: Key to Global Economic Court

Trump team meets China: Key to Global Economic Court

CNN - Trump's top trade officers will meet with their Chinese colleagues this week in order to discuss a de -escalation of the increasingly harmful trade war. The success of these conversations could be crucial for the future of the global economy.

First personal meeting since the start of tariff escalation

The trade talks are the first personal meeting between Chinese and American officials since the tariff escalation started seriously in March. Treasurer Scott Bessent said on Tuesday that Trade agreement comes about . The tariffs have now reached such a high threshold that the trade between the two countries has decreased dramatically. Any relaxation of the trade war could be a Positive signal for companies and consumers of both countries as well as worldwide.

high tariffs burden the economy

The United States has raised a custom of at least 145% for most Chinese imports, while China introduced a custom of 125% to some US import products. The last duty -free ships - those that were on the water when the tariffs were announced - have created almost all of them, and the first ships with goods that are liable to pay, reach the ports .

This means that companies in China and the United States will soon be faced with a difficult decision: either they pay tariffs that are more than doubled the costs of imported goods, or they completely hire sales. Consumers will have to expect higher prices in the coming weeks and possibly even bottlenecks.

The strict tariffs have already affected both economies. The US economy shrank in the first quarter, it was the first decline in three years, when companies were hoarding, in anticipation of the "liberation day" in Trump, which in the second Quarter came into force. In the meantime contracted the industrial production in China in April at the fastest speed in 16 months, and the government planned, and the government To support the economy with another round of economic stimulus programs.

global effects and warnings

Although the trade conflict between China and the USA is the most aggressive, Trump has also raised considerable tariffs to most other countries: a general custom of 10% to almost all goods that enter the United States, as well as 25% tariffs on steel, aluminum, car parts and some goods from Mexico and Canada. The world looks forward to the conversations.

Worldwide economists of the International Monetary Fund, the OECD and the World Bank have all predicted that Trump's trade war will have catastrophic effects on the global economy, growth in some countries will slow down and at the same time heat inflation. The United States will probably be one of the most affected economies, while other nations, including China, retaliate with higher tariffs. Many US economists and large banks assume that the United States could get into a recession this year.

positive reports from Switzerland

Bessent and the US trade representative Jamieson Greer will travel to Geneva to speak to the Chinese officials, Authorities known on Tuesday .

Despite persistent tensions, both countries have signaled for several weeks that the current standstill is not sustainable. Besser and Trump both recognized that the tariffs are too high. In a Interview with NBC News Last week, Trump said that he would reduce the tariffs on China at some point.

China has largely asserted itself against Trump and rejected his claims that the countries were in active negotiations - a rejection that was improperly approved in an affidavit on Tuesday. China and declared the suggestions of the united states, to check for trade conversations, to start.

The number of cargo ships who were traveling from China to the United States, Sank for 60% Freight service provider. JPmorgan estimates that Chinese imports into the United States will collapse by up to 80% until the second half of the year.

"A decline of 60% for containers means 60% less that arrive," the CEO of Flexport, Ryan Petersen, told CNN on Tuesday. "It is only a matter of time before you have sold your existing inventory, and then you will find bottlenecks. And then the prices will increase."

The port of Los Angeles had expected 80 ships in May, but 20% of which have already been canceled, said Gene Seroka, the Executive Director of the port of Los Angeles, compared to CNN on Tuesday. Customers have already canceled 13 trips for June.

"This week we have a decline of around 35% compared to the same period of last year, and these cargo ships are the first to be imposed with tariffs that have been imposed against China and other locations last month," said Seroka. "That's why the freight volume is so low."

Despite the increasingly alarming warnings and economic turbulence, the two countries are still far from an agreement. Both sides have buried themselves and insist that they need great concessions at the beginning of the negotiations. Besser has indicated that it could take two to three years for the trade to be normalized again.

The talks in Switzerland are now particularly important. Even without a trade agreement in your pocket, personal discussions are encouraging. Since both countries cause so much damage to each other, they have hardly any other choice than to start the de -escalation process.

"At some point I will lower them, because otherwise you could never do business with them," said Trump in a Interview "Meet the Press with Kristen Welker", which was recorded on Friday. "You want to do business very much ... your economy breaks down."