From the New York Times, I'm Natalie Kittrow-F. This is the Daily.

Over the weekend, the U.S. and China met for the first time since President Trump rapidly escalated a trade war between the world's two economic superpowers.

The negotiations could have huge implications for a global economy rocked by Trump's tariffs.

Today, my colleague, Beijing Bureau Chief Keith Bradshaw, on the pressures facing China as it came to the negotiating table,

and why it so badly needs a deal.

It's Monday, May 12th. It's Monday, May 12th.

Keith, it's nice to have you back on the show.

Thank you, Natalie. Good to be back.

So we on the show have talked quite a bit about the impact of tariffs on the U.S. economy.

We've talked less about the impact of tariffs on China's economy.

And as we enter what seems like potentially a new phase in this trade war where the two sides are talking to one another,

it seems important to understand something you've been reporting on, Keith, which is that the tariffs present a real nightmare scenario for China. Tell me about that.

President Trump, by early April, had raised tariffs on goods from China to 145%. Right.

That stopped all but the most essential imports coming in.

Why was this terrible timing for this to happen to China right now?

It was because China is already struggling with several severe economic problems. The biggest of them is the housing market crisis.

Apartment prices have plummeted. 30, 40, in some cases, some cities 50% drops in apartment prices

since the high of the bubble in 2021. So this has been a huge blow to the

household finances of people in China. In turn, they've stopped spending money on consumer goods.

And the tax revenues of the Chinese government are also way down. So they've got a huge budget

problem. So when you've

got a property crisis and an emerging budget near crisis, that's a very bad time to have a trade war.

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