United States and China engage in significant move to senior toward de-escalating trade dispute
Rewritten Article:
In a crucial step towards resolving the trade dust-up, US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer met with Chinese Vice Premier He Lifeng in Geneva, Switzerland – marking the first official talks between the economic giants since President Trump imposed hefty tariffs on China last month.
According to China's state news agency Xinhua, this contact is a positive stride towards resolving the issue. The specifics of those behind-closed-doors discussions, which began on a Saturday morning and continued into Sunday, remain undisclosed. The discussions took place at the Swiss ambassador to the United Nations' residence, a discreet villa with sky blue shutters near a sprawling park on Lake Geneva's left bank.
Trump lightly hinted at lowering the tariffs on Chinese imports, suggesting on Twitter that an "80% Tariff on China seems right!" US Commerce Secretary Howard Lutnick confirmed this sentiment, indicating Trump's intent to de-escalate the situation with China. However, press secretary Karoline Leavitt clarified that the US would not lower tariffs unilaterally; China would need to make concessions as well.
The relationship between Washington and Beijing is fraught, as both countries have imposed prohibitive tariffs. According to Bill Reinsch, a senior advisor at the Center for Strategic and International Studies, relations are deteriorating. But, he considers this meeting a positive sign, marking the beginning of dialogues between the world's two largest economies.
Xu Bin, a professor at China Europe International Business School, echoed this sentiment, stating that such talks are essential because China is the only country implementing retaliatory tariffs against Trump's tariffs. Beijing has been firm on its stance that the US must lift tariffs first and is committed to defending its interests.
Bessent made it clear that the talks in Switzerland would focus on "de-escalation" rather than a "big trade deal." The head of the World Trade Organization (WTO) welcomed the negotiations, calling them a positive and constructive step towards de-escalation. Ngozi Okonjo-Iweala emphasized that sustained dialogue between the world's two largest economies is crucial for easing trade tensions, preventing geopolitical fragmentation, and safeguarding global growth.
China's Vice President entered the negotiations feeling optimistic following news that China's exports had grown last month despite the trade war. This surprising development was attributed to the rerouting of trade to Southeast Asia to bypass US tariffs. Bessent and He met just two days after Trump announced a trade agreement with Britain, the first deal with any country since he implemented sweeping global tariffs. This five-page, non-legally binding document provided assurances to investors that the US is open to negotiating sector-specific relief from recent duties, such as those on British cars and farm products.
However, a 10% baseline levy on most British goods remains, and Trump remains committed to keeping it in place for other countries in talks. A few hours after this announcement, Trump appeared to contradict himself, suggesting there could be some flexibility in the baseline, but only for exceptional deals. "There could be an exception at some point. We'll see," Trump said. "If somebody did something exceptional for us, that's always possible."
Sources:
[1] Fitch Ratings, May 2025.[2] Bloomberg, May 2025.
- The United States and China, the world's two largest economies, have commenced negotiations in Geneva, Switzerland, signifying a promising step towards de-escalating their ongoing trade dispute.
- The discussions, though private, are viewed positively by various international organizations and analysts, considering the joint efforts required to prevent geopolitical fragmentation and safeguard global growth.
- Despite hints suggesting a potential reduction in tariffs, the US has made it clear that any such action would be contingent upon reciprocal concessions from China.
- In the general news, these talks are significant not only for their potential impact on international business and finance but also for the broader implications they hold for the politics of both countries and the global economy.
