China’s Commerce Ministry said it is open to considering a U.S. proposal to hold talks about President Trump’s 145% tariffs, while cautioning that any negotiations should not be used as a pretext for “coercion and extortion.” The announcement follows conflicting statements after Mr. Trump suggested talks were already underway; Chinese officials initially denied that claim. The dispute has escalated quickly: Washington has imposed a 145% tariff, and Beijing retaliated with a 125% tariff. Analysts warn that such steep duties could effectively halt trade between the world’s two largest economies.
The timing of this standoff is difficult for China, which is contending with deflationary pressures, sluggish growth and ongoing problems in its property sector. Facing domestic strains, Beijing has nonetheless granted quiet exemptions on some U.S. goods from retaliatory tariffs, including certain pharmaceuticals and semiconductor components, in order to ease supply stresses in sensitive areas. At the same time, the Trump administration has tightened rules on low-value shipments, eliminating duty-free treatment for many small parcels from China and Hong Kong.
U.S. officials express cautious optimism about the prospects for negotiation. Treasury Secretary Bessent said he is “confident that the Chinese will want to reach a deal,” and outlined a potential multi-step approach that would begin with de-escalation of tariffs and move toward more comprehensive talks. Observers note, however, that trust will be a crucial obstacle: both sides must bridge differences not only on tariffs but also on broader issues such as industrial policy, technology transfer and market access to achieve a durable agreement.
Economists warn that prolonged high tariffs would have consequences on global supply chains and consumer prices. Businesses that rely on cross-border inputs may face higher costs, prompting firms to consider relocating manufacturing or redesigning supply arrangements. Consumers could see higher costs on imported goods, and companies that source components from China or sell into the U.S. market may reassess investment plans in light of increased trade uncertainty.
For China, the combination of deflationary trends and a fragile domestic property market heightens sensitivity to external shocks. Policymakers must weigh the short-term relief of protecting domestic industries against the long-term risks of reduced export revenues and slower growth. For the U.S., maintaining pressure through tariffs aims to address perceived unfair trade practices, but risks backlash from American companies and consumers hurt by rising import prices.
Markets and analysts will be watching closely for any concrete steps toward talks and whether those discussions can be conducted without preconditions that could stymie progress. If negotiations begin, the initial focus is likely to be on rolling back the most damaging tariffs and reaching temporary understandings to stabilize trade flows, while longer-term rounds would tackle structural issues. Until then, the standoff serves as a reminder of how quickly trade tensions can escalate and how disruptive steep tariffs can be to global commerce.