US President Donald Trump is scheduled to meet with China’s President Xi Jinping this week.
This was confirmed by White House press secretary Karoline Leavitt.
The conversation comes at a crucial time as the world’s two biggest economies negotiate a contentious trade conflict that could significantly affect world markets.
This will be the first time Trump and Xi have spoken directly since Trump took office on January 20.
Reuters said they had their final known chat before Trump’s inauguration.
Leavitt affirmed, “It will occur within the next few days,” indicating the administration’s intention to resolve urgent trade issues before fully implementing tariffs on Chinese goods.
China Tariffs Stay the Same While Canada and Mexico Get a Break
Citing the need to stop the supply of illegal fentanyl, a synthetic opioid that causes many drug overdoses in the United States, Trump issued an order over the weekend for sweeping tariffs on China, Canada, and Mexico.
He did, however, remove the proposed tariffs on Canada and Mexico on Monday while continuing to put pressure on China.
Trump first imposed a 10% tariff on all Chinese goods, which was scheduled to go into force on Tuesday. He cautioned that this was only an “opening salvo” in the trade war, even if it was less than the 60% tariff he had promised during the campaign on Chinese imports.
Trump reaffirmed his administration’s resolve to stricter trade sanctions if Beijing does not abide by U.S. requests by saying, “Hopefully, China will stop sending us fentanyl, and if they don’t, the tariffs are going to go substantially higher.”
China Indicates It Is Open to Talks
Beijing has always said tariffs are ineffective, but it has responded cautiously to the most recent actions.
According to a Reuters person who knows the situation, China may be amenable to reaching a deal with Trump to postpone or stop further tariff increases.
China has continuously refuted allegations that it is the primary supplier of precursors to fentanyl, claiming that it has put strict laws in place to stop the manufacture of illegal drugs. The United States, meanwhile, insists that Mexican drug cartels are still using Chinese-made compounds to exacerbate the opioid crisis.
Market Reactions: Investors Wary, Yuan Under Pressure
The rising trade tensions have caused financial markets to become more volatile. On Monday, the U.S. dollar hit a record high versus the offshore Chinese yuan, indicating investor apprehension over the possible economic consequences of protracted trade disputes.
Experts caution that additional tariff increases may worsen supply chain interruptions, increase inflation, and pressure international trade networks.
Investors are focusing on the Trump-Xi discussion since any indication of a deal might allay market fears.
Key Takeaways:
- Amid impending tariff deadlines, U.S. President Donald Trump will meet with President Xi Jinping this week.
- Trump levied a 10% tariff on Chinese goods, with further increases possible if China doesn’t stop exporting fentanyl.
- As tensions rise, the U.S. dollar reaches all-time highs versus the offshore yuan.
