U.S. and Chinese negotiators worked behind closed doors in Switzerland on Saturday, holding high-stakes talks, which provided the two countries with the most obvious opportunity to reduce their trade war, which President Donald Trump called “very good” meeting.
U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier are leading two-day negotiations expected to be held in Geneva, the first public, face-to-face negotiations since President Donald Trump imposed a 145% tax on China and Beijing’s 125% tariff on many U.S. goods and new export controls on rare earths.
“Today was a very good meeting with China in Switzerland,” Trump said in a post about the Truth Society. “A lot of things were discussed, very agreeable. The total reset was carried out in a friendly but constructive way. We hope to see that China opens up to American commerce for the benefit of China and the United States. Great progress has been made!!!”
Jamieson Greer, head of U.S. trade, also attended the meeting. Discussions at the United Nations Swiss mission in Geneva have ended and are expected to continue on Sunday, according to a person familiar with the matter.
Both sides tried to project their confidence in prevailing, but the status quo presents significant risks.
The TAT’s tat shocked financial markets while threatening U.S. consumers’ product shortages and higher prices put pressure on Trump to find a deadlock with Xi Jinping. The Chinese leader tried to strengthen his country’s economy before negotiations, but the data showed signs of weakness.
The Swiss official commentary said in a comment posted on Saturday that the meeting in Switzerland is a “important step towards solving the problem” and that the ultimate solution will require sufficient patience and determination, as well as the support of the international community. The state-owned news agency also reiterated China’s determination to protect its national interests and maintain an international trade order.
The U.S. president sent a mixed signal about his expected outcome of the meeting. Trump has repeatedly said he was reluctant to lower tariffs without a Chinese concession, although he volunteered to participate in the 80% tax on Friday “seemed to be right.”
“We have to do a lot for the United States,” Trump told reporters at the Oval Office late Friday. “I think we will bring a fair deal for China and us.”
Bessent downplayed any potential outcome on Wednesday and told lawmakers that negotiations were in an early stages, focusing on reducing tensions rather than reaching a full deal. But Trump himself said Thursday that he expects “substantial” progress. Other U.S. officials highlighted opportunities for conflict resolution.
Commerce Secretary Howard Lutnick said on Fox News Friday night that there is no chance to completely suspend tariffs regardless of the outcome of the weekend negotiations. He added that if these negotiations go well, the taxation “down to the level of humanity. It’s where we do business. There are big tariffs and the president will maintain a significant tariff on trade with China. That’s his goal. It’s his expectation. It should be everyone’s expectation.”
China is taking a vigilant approach to lower expectations before negotiations and considering them more like exploratory rather than generating direct large bargains. Director of the Center for American Studies in Shanghai, Foreign Secretary Advisor, and Xi Jinping’s representative will measure the degree of seriousness of American peers in seeking breakthroughs.
The two economies combined have a GDP of $46 trillion, and if they stumble, they lose a lot. According to Bloomberg Economics’ estimates, current levels of tariffs will damage 90% of bilateral trade.
The consequences of the trade struggle have emerged that can make more economic pain adapt to the lack of agreements.
Transport volumes from China to the United States collapsed. In China, factories for daily consumer goods slow down or idle. The two-way annual trade between the two countries is about $700 billion, and China’s portfolio investment in the United States is estimated to be $1.4 trillion.
The conflict prompted Beijing to expand trade with other markets, with exports to the United States down 21%. Trade data released on Friday showed that goods from China to the EU soared 8% last month.
Meanwhile, China’s domestic economy is plagued by creating dull numbers and it is unlikely to improve the spiral spiral as weaker competition in the labor market intensifies.
While the U.S. economy continues to stick with it, analysts warn that in the coming weeks and months, commodity shortages will begin to surface in the form of empty shelves, threatening jobs, especially those in trucking, logistics and retail. The Fed warns of rising uncertainty. Since 2022, the U.S. economy has contracted early this year, although a range of potential demand has remained firm.
The consequences of the U.S.-led trade struggle are presented globally. The World Trade Organization cuts its forecast for commodity trade this year and now expects the number to fall by 0.2%, almost lower than the 3 percentage points without a trade war. The IMF in April drastically lowered growth expectations this year, warning that the outlook could worsen further.
For Trump, the highest goal is to rebalance trade, and the president reiterated Friday that he wanted to see Beijing open up markets to the United States. Trump has also repeatedly stated that he believes entering the U.S. market is a key leverage for forced concessions.
“They have a lot to gain,” Trump told reporters on Thursday. “In a sense, they’re getting much more than we have.”
But China believes tariffs are just one aspect of the broader U.S. move to limit its rise. Regina IP, convener of the cabinet of John Lee, Hong Kong MP and CEO, said that for Beijing, the conflict is not only a trade war. She said it threatens its survival.
“China is determined to put it on the chin – ‘Don’t kneel down – they all took a very difficult route,” she said. However, she warned: “both sides must play their cards very carefully. They must act very carefully and not escalate.”
Even a week before the negotiations, both Washington and Beijing were trading barbs in exchange for whom initiated them.
The U.S. priority to enter the negotiations is to ensure restrictions on exports to China, which are used to make use of magnets in everything from robots to jet engines.
The Trump administration also hopes China will curb fentanyl trafficking by stifling the flow of precursors used to make opioids. However, there is a continuous progress on a separate track outside of the Geneva negotiations.
China said it had forced a crackdown on the fentanyl trade, even saying Washington attributed it to its “very thanks.”
More stories like this are available Bloomberg.com
Published on May 11, 2025
