In a significant development in U.S.-China relations, the Chinese Embassy in the United States has announced that China’s Vice Premier He Lifeng will meet with U.S. Treasury Secretary Scott Bessent in Switzerland from May 9 to 12. This announcement signals a potential step forward in diplomatic dialogue between the two economic superpowers.
“Based on full consideration of global expectations, China’s interests, and the appeals of the U.S. business community and consumers, #China has decided to agree to engage with the #US side,” said The Chinese Embassy’s official X page. The post continued, “As China’s lead on China-U.S. economic and trade affairs, Vice Premier He Lifeng will hold talks with U.S. Treasury Secretary Scott Bessent during his visit to #Switzerland from May 9 to 12.”
It’s unclear exactly what prompted the change in stance.
On May 2, the same Chinese Embassy X account said, “if the US does not rectify its erroneous unilateral tariff measures, it would demonstrate a complete lack of sincerity and further undermine mutual trust. Saying one thing while doing another, or even attempting to use talks as a cover for coercion and blackmail, will not work with China.”
It’s been clear that President Trump was open to engaging in trade talks, but China held firm that they won’t engage in talks until tariffs are lowered or removed. Given that many manufacturers, including Apple (AAPL), have announced plans to slowly leave China, it could be an attempt to win back U.S. businesses before any permanent damage is done.
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Bill Ackman’s Response and Ongoing Commentary
Shortly after the embassy’s tweet, Bill Ackman, the billionaire investor and CEO of Pershing Square Capital Management, responded with a simple but notable reply: "Thank you China!"
Just hours before the embassy’s announcement, Ackman posted a tweet proposing a novel approach to U.S.-China trade tariffs. He suggested an initial reduction of tariffs on Chinese goods to 20%, followed by a gradual increase of 0.5% per month for the next 12 months. This incremental increase would continue, with higher escalation rates in subsequent years, creating a strategic pressure mechanism for China to improve its trade practices.
Ackman emphasized that this approach would provide U.S. companies with time to transition their supply chains away from China while maintaining profitability. He further highlighted that the increases could be adjusted or reversed based on China’s compliance with fair trade practices.
China’s Calculated Move
China’s decision to engage in direct talks with the U.S. reflects its strategic interest in maintaining stable trade relations, especially in light of recent economic challenges. The choice to engage at the vice-premier level underscores the importance China places on this dialogue.
The upcoming meeting between Vice Premier He Lifeng and Secretary Bessent could mark the beginning of a new phase in U.S.-China trade relations. The direct engagement could potentially lead to policy adjustments or new agreements between the two economic giants.
The Chinese Embassy’s announcement and Bill Ackman’s subsequent commentary highlight the complexity and importance of U.S.-China trade relations. With the upcoming meeting in Switzerland, both sides have an opportunity to discuss critical issues that could reshape the economic relationship between the two countries.
