US-China Trade Talks in Geneva: A Cautious Step Toward Reconciliation

By IndraStra Business News Desk

Cover Image Attribute: WD Stuart | iStock

The world’s two largest economies, the United States and China, have reached a critical juncture. After months of escalating tariffs that have crippled nearly $600 billion in annual bilateral trade, top officials from both nations met in Geneva on Saturday (May 10, 2025) to begin negotiations aimed at de-escalating a trade war that threatens the global economy. The talks, held in the residence of Switzerland’s ambassador to the UN, mark the first high-level, face-to-face discussions since President Donald Trump unleashed a tariff blitz in February, imposing duties as high as 145% on Chinese goods, with some reaching a staggering 245%. China, in turn, retaliated with 125% levies on American exports, bringing trade between the two powers to a virtual standstill. While the Geneva talks have sparked cautious optimism, they also underscore the deep-seated tensions and systemic challenges that continue to define US-China relations. As both sides navigate this delicate moment, the stakes could not be higher—not only for their own economies but for global markets, supply chains, and consumers already reeling from the fallout.
President Trump has described the discussions as “very good,” hailing them as a “total reset negotiated in a friendly, but constructive, manner.” His enthusiasm, expressed in a Truth Social post early Sunday, reflects a shift from the fiery rhetoric that has characterized much of the trade war. “We want to see, for the good of both China and the U.S., an opening up of China to American business,” he wrote, adding, “GREAT PROGRESS MADE!!!” Yet, the absence of specific details about this progress raises questions about the substance of the talks. Neither the US delegation, led by Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, nor China’s Vice-Premier He Lifeng issued statements about the outcomes of their eight-hour meeting on Saturday. This silence, combined with the fact that negotiations were expected to continue into Sunday or even Monday, suggests that while the talks represent a step forward, a breakthrough remains elusive.
The backdrop to these negotiations is a trade war that has inflicted significant damage on both sides. The US, seeking to address its $295 billion goods trade deficit with China, has accused Beijing of maintaining a mercantilist economic model that stifles global consumption. Washington’s tariffs, which Trump suggested on Friday could be adjusted to 80% as an alternative to the current 145%, are designed to pressure China into opening its markets and reducing subsidies for key industries. Meanwhile, China has condemned the US for what it calls a “reckless abuse of tariffs” that has destabilized the global economic order, according to a commentary from the state-run Xinhua news agency. Beijing’s retaliatory levies have hit American exporters hard, while Chinese manufacturers face declining factory output, with April’s activity dipping to its lowest level since December 2023. The pain is mutual: the US economy contracted for the first time in three years due to tariff-related uncertainty, and industries reliant on Chinese goods, such as a Los Angeles toy company, are facing what one owner described as “the total implosion of the supply chain.”
The timing of the Geneva talks is no accident. Both nations are under mounting pressure to provide reassurance to nervous markets, businesses, and domestic constituencies. In the US, Trump’s approval ratings have slipped amid fears of inflation and a potential recession, with over 60% of Americans believing he has focused too much on tariffs. The president himself has acknowledged the impact on consumers, noting at a cabinet meeting that American children may “have two dolls instead of 30 dolls” and that those dolls might “cost a couple bucks more.” On the Chinese side, the talks coincide with President Xi Jinping’s visit to Moscow for the Victory Day parade, where he stood alongside leaders from the Global South. This diplomatic maneuver allowed Beijing to project strength and remind the US that it has alternative trade partners, even as it engages in negotiations. As Stephen Olson, a former US trade negotiator, observed, “Both countries are feeling pressure to provide a bit of reassurance to increasingly nervous markets, businesses, and domestic constituencies. A couple of days of meetings in Geneva will serve that purpose.”
Yet, the question of who initiated the talks reveals the delicate dance of saving face that both sides are performing. Trump has claimed that Chinese officials “want to do business very much” because “their economy is collapsing,” while China’s foreign ministry spokesperson, Lin Jian, insisted that “the talks are being held at the request of the US.” The commerce ministry in Beijing framed the negotiations as a response to the “calls of US businesses and consumers,” suggesting it was doing Washington a favor. Trump, however, dismissed the debate over who made the first move, telling reporters on Thursday, “We can all play games. Who made the first call, who didn’t make the—it doesn’t matter. It only matters what happens in that room.” This pragmatic tone, echoed by US Commerce Secretary Howard Lutnick’s statement that “the president would like to work it out with China” and “de-escalate the situation,” hints at a willingness to find common ground, even if neither side is prepared to appear as though it has caved.
The Geneva talks are a positive development, but expectations for an immediate resolution are low. Analysts like Bert Hofman, a professor at the National University of Singapore, describe the negotiations as an opportunity to “touch base” and, at best, establish an agenda for future discussions. The history of US-China trade talks supports this cautious outlook. During Trump’s first term, nearly two years of tit-for-tat tariffs culminated in a “phase one” deal in 2020 that suspended or reduced some levies but left many issues unresolved, including Chinese government subsidies and a timeline for dismantling remaining tariffs. Those levies persisted through the Biden administration, and Trump’s latest tariffs have only intensified the standoff. Olson suggests that the current talks could lead to a “phase one deal on steroids,” addressing not only trade imbalances but also contentious issues like the illegal fentanyl trade and China’s relationship with Russia. However, he warns that “the systemic frictions that bedevil the US-China trade relationship will not be solved any time soon.”
The Swiss setting of the talks, described as a diplomatic hub but kept discreet with delegations shuttling in Mercedes vans with tinted windows, adds a layer of symbolism. Switzerland’s economy minister, Guy Parmelin, called the fact of the talks themselves a success, noting, “If a road map can emerge and they decide to continue discussions, that will lower the tensions.” His optimism reflects the broader hope that dialogue, however tentative, can prevent further escalation. Yet, the challenges are formidable. The US insists that China must make concessions before tariffs are lowered, as Trump’s press secretary, Karoline Leavitt, emphasized. Beijing, meanwhile, demands that Washington clarify what it expects China to purchase and reduce its own tariffs, viewing the US measures as external interference. The Xinhua commentary framed the negotiations as “a positive and necessary step to resolve disagreements and avert further escalation,” but China’s resolve to “fight till the end” suggests it is prepared for a prolonged struggle if its demands are not met.
For now, the Geneva talks offer a glimmer of hope in a trade war that has disrupted supply chains, unsettled financial markets, and stoked fears of a global downturn. The fact that both sides are willing to sit at the negotiating table, despite months of posturing and mutual accusations, is a testament to the economic and political pressures they face. Yet, the path to a meaningful agreement is fraught with obstacles. The US and China must navigate not only their immediate trade disputes but also deeper issues of economic philosophy, global leadership, and national pride. As Olson aptly noted, “Neither side wants to appear to be backing down.” The talks may produce “anodyne statements about ‘frank dialogues’ and the desire to keep talking,” but achieving a lasting resolution will require compromises that neither side has yet shown a willingness to make.
The stakes are high, as the results of these negotiations may determine the direction of US-China ties and impact international markets. For American consumers facing higher prices and Chinese exporters grappling with stockpiles, the stakes are immediate and tangible. For policymakers in Washington and Beijing, the challenge is to balance domestic priorities with the need for cooperation in an interconnected world. The Geneva talks may not yield a dramatic breakthrough, but they represent a critical opportunity to begin rebuilding trust and stability. Whether this fragile thaw can withstand the pressures of politics and pride remains to be seen, but for now, the fact that the US and China are talking at all is a step in the right direction.
With reporting by BBC, The Guardian, and Reuters

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