The United States and China will hold trade talks in Switzerland this week, officials have said, as the world’s two largest economies seek to de-escalate tensions that have led to a de facto mutual trade embargo.

The talks would be the first official engagement between Washington and Beijing on trade since US President Donald Trump slapped a 145 percent tariff on Chinese goods, prompting a retaliatory 125 percent duty from China.

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US Secretary of the Treasury Scott Bessent and US Trade Representative Jamieson Greer will attend the talks for the US side, their offices said in a statement on Tuesday.

Chinese Vice Premier He Lifeng will represent Beijing, China’s Ministry of Foreign Affairs said in a statement.

Businesses and investors have been anxiously waiting for signs of a thaw in US-China tensions amid fears a prolonged trade war could cause serious damage to the global economy.

The International Monetary Fund last month lowered its global growth forecast for 2025 from 3.3 percent to 2.8 percent amid Trump’s trade salvoes.

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Economists have increasingly warned of the possibility of the US economy tipping into a recession this year, with JP Morgan Research putting the likelihood at 60 percent.

The US economy shrank 0.3 percent in the first quarter – a period before most of Trump’s tariffs came into effect – the first decline since early 2022.

In an interview with Fox News after the talks were announced, Bessent said the two sides had a “shared interest” in talks as the current levels of tariffs were unsustainable.

“We don’t want to decouple. What we want is fair trade,” Bessent told Fox News host Laura Ingraham.

Bessent said he expected the initial talks to focus on “de-escalation,” rather than a “big trade deal”.

“We’ve got to de-escalate before we can move forward,” he said.

China’s Ministry of Commerce said on Wednesday that the talks should proceed on the “basis of mutual respect, equality, consultation, and mutual benefit”.

“As a Chinese saying goes, ‘Listen to their words and observe their actions,’” a ministry spokesperson said.

“If the US wishes to resolve issues through negotiation, it must acknowledge the severe negative impacts its unilateral tariff measures have had on itself and the world,” the spokesperson said, adding that the US should “respect international economic and trade rules and the voices of fairness and reason from various sectors” and “correct its wrongful actions.”