BEIJING – Mr Xi Jinping’s decision to stand his ground against US President Donald Trump could hardly have gone any better for the Chinese leader.

After two days of high-stakes talks in Switzerland, trade negotiators from the world’s biggest economies announced on May 12 a massive de-escalation in tariffs. In a carefully coordinated joint statement, the US slashed duties on Chinese products to 30 per cent from 145 per cent for a 90-day period, while Beijing dropped its levy on most goods to 10 per cent. 

The dramatic reduction exceeded expectations in China, and sent the dollar and stocks soaring – providing some much-needed market relief for Mr Trump, who is facing pressure as inflation looks set to speed up at home. Chinese equities also surged.

The deal ended up meeting nearly all of Beijing’s core demands. The elevated “reciprocal” tariff for China, which Mr Trump set at 34 per cent on April 2, has been suspended – leaving America’s top rival with the same 10 per cent rate that applies to Britain, a long-time ally. 

The US met Beijing’s call for a point person for talks by setting up a mechanism headed by US Treasury Secretary Scott Bessent. And the two sides agreed to take “aggressive actions” to stem the flow of fentanyl, which could eventually lead to the elimination of the additional 20 per cent tariff. 

“This is arguably the best outcome that China could have hoped for – the US backed down,” said Mr Trey McArver, co-founder of research firm Trivium China. “Going forward, this will make the Chinese side confident that they have leverage over the US in any negotiations.”

Mr Xi struck a defiant tone ever since Mr Trump began raising US tariffs to their highest level in a century. In contrast to other world leaders, he refused Mr Trump’s repeated calls to get on the phone with the US President – even as tariffs rose to levels that China called a “joke”.

Officials in Beijing instead