In a significant step toward easing trade tensions, the United States and China concluded two days of high-level negotiations in Geneva with both sides reporting “substantial progress.” While specific outcomes remain under wraps, officials announced the creation of a new consultation mechanism to manage future economic and trade discussions. The talks mark the most serious attempt in years to reset relations after years of escalating tariffs and economic confrontation.
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Substantial Progress Reported in Key Geneva Trade Talks
In a significant step toward easing trade tensions, the United States and China concluded two days of high-level negotiations in Geneva with both sides reporting “substantial progress.” While specific outcomes remain undisclosed, officials announced the creation of a new consultation mechanism to guide ongoing economic and trade discussions. The breakthrough marks the most meaningful attempt in years to reset relations after a prolonged trade war marked by escalating tariffs and political tensions.
Chinese Vice Premier He Lifeng, who co-led the talks with U.S. Treasury Secretary Scott Bessent, described the meetings as “honest, in-depth, and constructive.” He confirmed that the two countries agreed to establish a regular dialogue platform to prevent future misunderstandings and manage economic disputes.
“This is an important first step,” He said. “We’ve reached an essential consensus that reflects mutual respect and a shared responsibility to stabilize global trade.”
A New Dialogue Mechanism to Ease Economic Strains
Both parties agreed that the new mechanism will be led by Bessent and He themselves. It aims to replace ad hoc negotiations with a structured consultation process, signaling a mutual interest in institutionalizing trade cooperation.
Bessent expressed optimism: “We made substantial progress in just two days. This shows the differences between us may not be as vast as once believed. The groundwork laid before these meetings made this rapid progress possible.”
Jamieson Greer, U.S. Trade Representative, also praised the professionalism of Chinese negotiators and emphasized that cooperation is essential. “We believe the agreement we reached will help us tackle the national trade deficit emergency,” he noted, referring to the $1.2 trillion U.S. goods trade deficit globally, including $295 billion with China alone.
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Tariff Reductions Still Under Discussion
Despite the optimistic tone, neither side confirmed any change to the punitive tariffs imposed in recent years. The Trump administration had levied tariffs of up to 145% on Chinese imports, citing China’s trade practices and alleged role in fentanyl trafficking. In retaliation, China slapped 125% tariffs on U.S. goods, leading to a damaging tit-for-tat exchange that disrupted global supply chains.
Although President Trump recently suggested an 80% tariff on Chinese goods would be “reasonable,” Beijing has maintained that any long-term solution must involve a rollback of U.S. tariffs. Chinese Vice Commerce Minister Li Chenggang told reporters, “If the dishes are delicious, the timing doesn’t matter. Whenever the agreement is announced, it will be good news for the world.”
Market Reaction and Geopolitical Implications
The financial markets responded with cautious optimism. The U.S. dollar strengthened against major currencies, while the offshore Chinese yuan and Australian dollar — often seen as proxies for China sentiment — also edged higher.
Analysts remain cautious. “While we’re skeptical that anything of substance could be resolved in just two days, it’s clear both sides want to de-escalate,” wrote Win Thin, head of market strategy at Brown Brothers Harriman & Co.
The talks were hosted at the residence of the Swiss ambassador to the United Nations and were seen as highly focused and cordial. Trump, meanwhile, actively commented on social media platform Truth Social during the meetings, calling the process a “total reset” and suggesting he may speak directly with President Xi Jinping depending on the outcome.
A Path Forward from the 2020 Trade Deal
The Geneva talks come nearly five years after the U.S. and China signed the Phase One Trade Agreement in January 2020. That deal, reached during Trump’s first term, required China to purchase over $200 billion in additional U.S. goods and services and open its markets to American businesses. However, Beijing fell short on its commitments, prompting criticism from Trump allies who accuse the Biden administration of not enforcing the agreement.
Now, both sides appear to be reopening the door to dialogue with greater urgency. With global supply chains still recovering from pandemic shocks and inflationary pressures persisting, the willingness of Washington and Beijing to re-engage could be a much-needed stabilizing force for the global economy.
Conclusion
While much remains uncertain, the Geneva talks mark a meaningful step toward rebuilding trust and cooperation between the U.S. and China. As negotiators continue to finalize details, the world watches closely — hopeful that two of the most powerful economies can find common ground in an increasingly fragile global landscape.
