Trade Talks Between US and China
High-ranking conversations between the United States and China have started in Geneva, Switzerland, in a possible thaw in the trade war triggered by the massive tariffs of President Donald Trump.
Key Representatives
Vice Premier Liu He will lead the talks on the Chinese side, while US Treasury Secretary Scott Bessent will be America’s chief representative. Bessent has asked the public not to expect a large trade agreement from the meetings, but he admitted that it was an important step in the negotiations.
Current Trade Situation
The United States has imposed at least 145% tariffs on most Chinese imports, and China has retaliated with a 125% tariff on most US imports. As a result, trade between the two sides has dropped sharply, according to logistics experts. Even a reduction of these tariff rates by half may not be sufficient to change the trading level significantly. Economists said that 50% was the make-or-break threshold for the return of some normal business between the two countries.
Impact on US Economy
The trade war has already influenced the US economy. The nation’s gross domestic product showed the first quarterly contraction of America since the beginning of 2022, as importers front-loaded goods before the higher tariffs were applied. The combination of fewer goods arriving in the US and increased costs for the arrival of imports has already started to increase prices for Americans. Goldman Sachs analysts said that an essential level of inflation would double to 4% by the end of the year due to Trump’s trade war.
Dependence on Chinese Goods
Americans depend on a large number of Chinese goods, which have become widespread in everyday life. Shoes, clothes, devices, microchips, baby goods, toys, sports equipment, office machine parts, and much more pour into the US from China in astonishing numbers. However, these imports are now taking off. According to the National Retail Federation, imports to the US in the second half of 2025 are expected to decrease by at least 20% compared to the previous year.
China’s Economic Situation
The trade war has also affected China, whose exports to the United States decreased significantly in April. Chinese exports to the US were $33 billion last month, a decrease of 21% compared to the $41.8 billion recorded in April 2024. Steep US tariffs have also taken a heavy toll on China’s manufacturing business. Chinese factory activity moved at the fastest pace in 16 months in April, increasing Beijing’s efforts to expand new economic incentives.
Hope for Relaxation
The news that Bessent and his colleagues would meet their Chinese counterparts in Geneva has raised hopes of relaxation between the two nations. The United States and China are the largest and second-largest economies in the world, larger than the next 20 economies combined. The meeting has sparked hopes that the two sides can find common ground and ease tensions.
Other Issues
Trump also mentioned that he would raise the case of detained Hong Kong media tycoon Jimmy Lai "as part of the negotiation". Lai is in the midst of a national security procedure that could send him to prison for life. However, it is unclear whether Lai’s case was discussed in the talks.
