China has revealed a series of measures designed to help its economy navigate the effects of the escalating trade war with the United States, hours after exploratory peace talks were announced.

Senior officials from both sides are to meet in Switzerland this weekend for what are understood to be the first face-to-face meeting between the world’s two largest economies in months.

The Trump administration has raised tariffs on Chinese goods to 145% while Beijing has responded with levies of 125% in recent weeks.

The effects are starting to be felt in both countries in respect of price, supply and business sentiment.

China’s export-dominated economy is showing strain in terms of factory order books while official figures recently revealed that the US economy contracted between January and March.

US Treasury secretary Scott Bessent and Chinese vice premier He Lifeng will lead their respective delegations.

President Trump had previously suggested that any talks would look to lower tariffs but China has demanded the US moves first.

A Commerce Ministry spokesperson said: “The Chinese side carefully evaluated the information from the US side and decided to agree to have contact with the US side after fully considering global expectations, Chinese interests and calls from US businesses and consumers.”

Commentators said it was impossible to know what could be achieved at the talks in Geneva but cautioned that any meaningful truce would take months to fully iron out.

Official Chinese economic data is yet to show the extent of the harm the trade war is causing but a coordinated stimulus effort was revealed by the authorities on Wednesday.

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Officials from the country’s central bank outlined plans to cut interest rates and reduce bank reserve requirements to help free up more funding for lending.

It will be hoped that bolstering activity in the economy will help lift prices generally as the country battles deflation.

Other help included government funding for factory upgrades.

The UK and India have struck an “ambitious” trade deal that will slash tariffs on products such as whisky and gin. 

The agreement will also see Indian tariffs cut on cosmetics and medical devices and will deliver a £4.8bn boost to the UK economy, according to the government.

It is also expected to increase bilateral trade by £25.5bn, UK GDP by £4.8bn and wages by £2.2bn each year in the long term.

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The news will be a welcome boost for the government following poor local election results, which saw Labour lose the Runcorn by-election and control of Doncaster Council to a resurgent Reform UK.

What will also be touted as a victory for Downing Street is the fact the government managed to strike a deal with India before the White House.

Speaking to reporters on Tuesday, Sir Keir Starmer hailed the “historic day for the United Kingdom and for India”.

“This is the biggest trade deal that we, the UK, have done since we left the EU,” the prime minister said.

What trade-offs are in the ‘historic’ deal with India?

Gurpreet Narwan

Business and economics correspondent

@gurpreetnarwan

This is the most significant trade deal Britain has negotiated since Brexit. It has been three years in the making with round the clock negotiations taking place in recent days.

Britain and India were coming from very different starting points. India’s economy is notoriously protectionist, with average tariff rates floating at around 130%. The UK, by comparison, is a very open economy. Our tariff rates hover around 5%. It means there were many prizes on offer for UK exporters, who are eyeing up a rapidly growing economy with increasingly powerful consumers.

The government will point to considerable concessions on 90% of tariff lines, 85% of them will go down to zero within the decade. It includes wins on whisky, which within ten years will be halved from the current 150%. No other country has managed to get India to move on that.

Of course there are trade-offs involved. The UK has agreed to lower tariffs on Indian textiles and apparel- a big employer in India. It will also make it easier for Indian professionals to come to the UK, something the Indians have been pushing hard on. However, there will be no formal changes to immigration policy.

Both countries have also refused to budge on certain industries. The UK has not lowered tariffs on milled rice, out of fear it could decimate native industries. The same applies to dairy for the Indians. Both sides have agreed quotas on cars for the same reason.

The Indians were pushing for an exemption for its high emission industries from the UK’s upcoming carbon tax. It is understood that will not happen.

“And it’s the most ambitious trade deal that India has ever done. And this will be measured in billions of pounds into our economy and jobs across the whole of the United Kingdom.

“So it is a really important, significant day. “

In a post on X, Indian Prime Minister Narendra Modi also welcomed the agreement as a “historic milestone” and added: “I look forward to welcoming PM Starmer to India soon.”

Negotiations for the deal relaunched in March after stalling under the Tory government over issues including trade standards and the relaxation of visa rules for Indian workers.

Overall, 90% of tariff lines will be reduced under the deal, with 85% of those becoming fully tariff-free within a decade.

Whisky and gin tariffs will be halved from 150% to 75% before falling to 40% by year ten of the deal, while automotive tariffs will go from more than 100% to 10% under a quota, the Department for Business and Trade (DBT) said.

For Indian consumers, there will be reduced tariffs on cosmetics, aerospace, lamb, medical devices, salmon, electrical machinery, soft drinks, chocolate and biscuits.

Meanwhile, British shoppers could see cheaper prices and more choice on products including clothes, footwear, and food products including frozen prawns as the UK liberalises tariffs.

India’s trade ministry said that under the deal, 99% of Indian exports will benefit from zero duty, Britain will remove a tariff on textile imports and Indian employees working in the UK will be exempt from social security payments for three years.

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Shadow trade secretary Andrew Griffith added: “It’s good to see the government recognise that reducing cost and burdens on businesses in international trade is a good thing, and that thanks to Brexit we can do.

“But it would be even better if they would apply the same reasoning to our domestic economy, where they remain intent on raising taxes, energy costs and regulatory burdens.”

The news was also welcomed by business group the British Chamber of Commerce, which said it was a “welcome lift for our exporters”.

William Bain, head of trade policy, said:  ”Against the backdrop of mounting trade uncertainty across the globe, these tariff reductions will be a big relief. Products from Scotch whisky to clothing will benefit and this will give UK companies exporting to India a clear edge on increasing sales.

“The proposals for a follow-up investment treaty will also provide a solid platform to grow manufacturing and other sectors in our two economies.”

At Sony Production studios in Culver City, an area of Los Angeles steeped in the movie business, a steady stream of cars and lorries comes and goes through the security gate.

It occupies the MGM lot which dates back to 1924. Gone With the Wind, The Wizard of Oz and Citizen Kane were shot here and, more recently, Interstellar and The Dark Knight Rises. But this is no longer the beating heart of movie making.

In Tinsel Town the bright lights of the film industry have been fading for some time. Production in Hollywood has fallen by 40% in the last decade, sometimes moving to other states like New Mexico, New York and Georgia, but more often outside the US entirely.

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A recent survey of film and TV executives indicates that Britain, Australia and Canada are now favoured locations over California when it comes to making movies.

San Andreas, a blockbuster film about a California earthquake, was shot in Australia. In America, a film about an Irish family settling in New York, was shot in Canada.

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The exodus of the film industry from Hollywood is mostly owing to economic reasons, with other countries boasting lower labour costs and more expansive tax incentives. But as productions have moved overseas, studios across Los Angeles are frequently empty and those who work behind the scenes are often out of work.

President Trump has approached this problem with a familiar reaction – sweeping tariffs, a 100% tariff on all foreign made films coming into the USA.

‘It’s a different kind of situation than producing cars overseas’

Justine Bateman is a filmmaker and sister of actor Jason Bateman. She is glad Trump is looking for solutions but does not understand how the tariffs will work. “I will say, I’m very glad to hear that President Trump is interested in helping the film business. But part of the problem is we just don’t have very much detail, do we?” she says.

“He’s made this big announcement, but we don’t have the detail to really mull over. He doesn’t even say whether it’s going to be films that are shown in the cinema or streaming movies, for example.

“Tariffs can be a profitable situation for when we’re just talking about hard goods, but something like a film and, particularly if you’ve got an American film that takes place in the south of France, you want to be in a particular location.

“So it’s a different kind of situation than producing cars overseas and bringing them back here.”

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At the Hand Prop Room in Los Angeles, they supply props for TV and film. The warehouse is brimful of virtually any prop you could imagine, from portraits of former presidents, to replica handguns to African artefacts and 18th century teapots. The walls are decorated with posters from some of the productions they’ve supplied, including Babylon, Oppenheimer and Ghostbusters.

‘It needs to be thought through’

In the past five years, the prop shop has been impacted by the COVID pandemic, by both the writers’ and actors’ strikes and the globalisation of the film industry. Business is at an all time low.

“It’s not helping when so many productions are not just leaving the state, but also leaving the country,” says Reynaldo Castillo, the general manager of the Hand Prop Room. “It’s Hollywood, we have the infrastructure that nobody else has and I think maybe to a certain point we took it for granted.

“I think we can all agree that we want more filming to stay in the country to help promote jobs. But you also don’t want to do something to hurt it.

“How does it work? Are there exceptions for X, Y, and Z? What about independent movies that have small budgets that are shot somewhere else that would destroy their ability to make something? It needs to be thought through and make sure it’s implemented the right way.”