Countdown to China Trade Talks

Knock, knock. Who’s there? Treasury Secretary Scott Bessent is set to head to Switzerland this weekend for trade talks with Chinese counterparts.Credit…Kayla Bartkowski/Getty Images

Icebreaker

The S&P 500 looks set to break a two-day losing streak as Washington and Beijing say that trade talks between the two are finally on, scheduled for this weekend in Switzerland. The news comes as investors await Wednesday’s Fed decision on interest rates.

But there continue to be signs that markets shouldn’t expect a quick break from President Trump’s trade war.

Treasury Secretary Scott Bessent said that the focus of the talks, which will involve Jamieson Greer, the United States trade representative, and He Lifeng, China’s vice premier for economic policy, would be more about de-escalation than achieving immediate tariff relief.

A reminder: Bessent, who has become the point person in negotiations, has said that it could take up to three years to achieve a full deal. But pressure is mounting as the escalating tariff fight has created, in Bessent’s words, “the equivalent of an embargo” between the two countries.

“We don’t want to decouple” with China, Bessent told Fox News. “What we want is fair trade.” (China, meanwhile, has to contend with a slowing economy: The People’s Bank of China cut short-term interest rates on Wednesday as part of a raft of stimulus measures.)

Trump is also playing down hopes for a quick resolution. “Stop asking, ‘how many deals have you signed this week?’,” he told reporters in the Oval Office on Tuesday, with Prime Minister Mark Carney of Canada, another trade partner in limbo, sitting next to him.