Substantial Progress in Trade Talks Between US and China, Says US Treasury Secretary
By Ankur Chandra | Updated at: May 31, 2025 07:30 PM IST
Date: 12th May, 2025
US Treasury Secretary, Scott Bessent has said that substantial progress was made in the latest round of trade talks between US and China. Mr. Bessent and China’s Vice-Premier He Lifeng held trade talks this weekend in Geneva and Switzerland. Before the trade talks, US President Donald Trump had tweeted that 80% tariff on Chinese goods would be fair. Presently, American tariffs on Chinese goods stands at 145%. Chinese tariffs on American goods stands at around 125%.
China’s Exports to USA in April Down After the High Tariffs
US President Donald Trump imposed tariffs as high as 145% on Chinese goods coming to America, at the beginning of April. In response, China imposed tariffs of 125% on American goods coming to China. China’s exports to USA fell year-on-year by 21% in April due to the effect of higher tariffs. Due to the fall in Chinese exports, China’s trade surplus with United States came down to $20.5 billion in April from $27.6 billion in March.
China’s Trade Surplus with United States
The huge trade surplus that China has with United States is the main bone of contention between the two countries. In 2024, total trade between China and USA stood at $582.4 billion. American exports to China in the year stood at $143.5 billion. China’s exports to USA in the year stood at $438.9 billion. This means that China’s trade surplus with America (or America’s trade deficit with China) in the year stood at $295.4 billion. This was a year-on-year increase of 5.8% over that in the previous year, 2023. Trade surplus (deficit) is the difference between the total value of exports and total value of imports between two countries.
Data Source: Office of The United States Trade Representative
US President Trump blames the higher tariffs that China imposes on American goods as one reason for the skewed trade between the two countries and the high US trade deficit. He has also alleged that China resorts to currency manipulation to keep its trade surplus with US high.
Currency manipulation means that China keeps its currency Yuan undervalued with respect to US dollar. An undervalued Yuan makes Chinese exports to USA cheaper. It also makes American exports to China more expensive. Consequently, demand for Chinese exports in USA goes up while demand for American exports in China goes down.
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Source: https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republic-china
