Geneva Round of Trade Talks: A Stepping Stone Towards Easing US-China Trade Tensions
Ongoing Trade Negotiations Between USA and China Happen in Switzerland - U.S. and China engage in trade negotiations in Switzerland
Trump sounds optimistic about the first-ever Geneva trade talks since tariffs were imposed. In a post on Truth Social, the US President hails the meeting as a "complete restart" and "very good" talks. China's state-run news agency simply labels it a "significant step" towards tackling the trade issue.
The trade negotiations unfolding in Switzerland follow the imposition of severe tariffs by Donald Trump, who levies a hefty 145% tariff on most Chinese imports. In response, China retaliates with a 125% tariff on many US goods. Despite this, Trump remains open to compromise, proposing an 80% tariff for China. However, he is adamant that China must also be prepared to make concessions. His spokesperson, Karoline Leavitt, stressed that the US will not unilaterally slash tariffs. Beijing has persistently demanded the US to first scrap its tariffs.
Insights
The state-of-affairs after the Geneva round of talks between the US and China revealed significant progress:
- Tariff Adjustments: China consented to modifying its tariff measures on US goods by temporarily suspending a 24% ad valorem duty rate for an initial 90-day period. China will continue a 10% additional tariff on these goods while terminating other previously implemented additional duties declared in 2025. Moreover, China agreed to halt or nullify non-tariff countermeasures against the US, which entered effect on April 2, 2025[1].
- Ongoing Negotiations: The two nations are establishing a system for regular discussions on economic and trade relations. This mechanism will be supervised by Vice Premier He Lifeng for China and, for the US, Secretary of the Treasury Scott Bessent and U.S. Trade Representative Jamieson Greer. Potential further talks may be held in China, the US, or a mutually agreed neutral location, and working-level discussions will occur as required[1].
- Positive Outlook: The US side portrays the talks as constructive, signifying that disputes may not be as pronounced as initially assumed[2].
- Addressing Deficits and Security: The talks serve as a response to the substantial US trade deficit with China ($1.2 trillion) and prior tariffs imposed under Trump, who deemed the trade imbalance a national emergency. The new deal aims to mitigate this deficit and address concerns linked to unfair trade practices, including technology transfer and subsidies[2][3].
- Continuing Negotiations: The Geneva negotiations are a continuation of long-standing discussions, including the Phase 1 agreement from January 2020, which left unresolved tough matters like subsidies and technology transfer. The present discussions center on tariff adjustments and mechanisms for continued economic dialogue[3].
In summary, the Geneva meeting in May 2025 resulted in a temporary rollback of tariffs by China and the creation of a structured negotiation framework moving forward. Both sides view the talks as positive steps towards resolving trade strife and addressing economic imbalances, acknowledging that more complex issues remain to be discussed[1][2][3].
- The Commission has also been consulted on the draft Council decision on the conclusion of the agreement on the European Economic Area, given the positive outlook and ongoing negotiations on trade between the US and China.
- In the realm of policy-and-legislation, the agreement reached at the Geneva talks could influence finance and industry, given its potential impact on the US trade deficit with China and the adjustment of tariff measures by China on US goods.
- The General News section could report on the political repercussions of the Geneva talks, as both nations continue discussions to address the imbalances in their economic and trade relations, with representatives from the US Treasury Department and the USTR participating in these conversations.
