Trade talks between the United States and China officially began in Switzerland on Saturday, aiming to address the ongoing trade dispute between the two largest economies in the world. This development comes after a significant escalation in tariffs, with the US increasing tariffs on Chinese goods by up to 145%, and China retaliating with a 125% tariff on American exports last month.
US and China Initiate Formal Trade Talks in Geneva
US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer met with Chinese officials, led by Vice Premier He Lifeng, in Geneva. The talks mark a significant step in efforts to resolve the trade conflict that has been disrupting global markets. While the exact location of the talks was not disclosed, a convoy of black cars was seen entering the residence of the Swiss ambassador to the United Nations. Sources confirmed that the two delegations had a two-hour meeting before heading to a lunch gathering.
The ongoing trade war has created uncertainty in markets, with both countries imposing tariffs on billions of dollars’ worth of goods. Despite cautious expectations, there is hope that the talks could lead to a reduction in the heavy tariffs affecting each nation’s trade.
Challenges and Hope for Tariff De-escalation
Although expectations for a major breakthrough are low, there is hope that the two nations may agree to reduce the tariffs that have been weighing on their economies. US President Donald Trump’s decision to raise tariffs on Chinese imports to 145% last month prompted a swift response from China, which retaliated by imposing a 125% tariff on American products. Ahead of the talks, Trump hinted at the possibility of tariff reductions, suggesting on social media that “80% tariff seems right! Up to Scott.”
Sun Yun, a senior expert on China at the Stimson Center, said that the meeting represents the first direct interaction between Scott Bessent and Vice Premier He Lifeng. However, she remained cautious about the chances of significant progress. “The best scenario is for both sides to agree to scale back the tariffs at the same time,” Sun Yun said. “Even a small reduction would send a positive message, but it cannot just be symbolic. It needs to be backed up with action.”
The Long-Running Trade Dispute and Its Global Impact
The trade dispute between the US and China began during Trump’s first term, when the US accused China of using unfair practices to dominate high-tech industries. Allegations included forcing foreign companies to share trade secrets, providing state subsidies to domestic firms, and engaging in technology theft.
In 2020, the two nations signed a “Phase One” trade deal. Under this agreement, the US agreed to halt further tariff increases, while China committed to purchasing more American products. However, due to the COVID-19 pandemic and other challenges, China did not fully meet its commitments.
The impact of the trade war has been felt beyond just the US and China. The United States’ trade deficit with China reached €233 billion last year, contributing to global economic uncertainty. Trump has continued to use tariffs as a primary tool in his trade policies, not just with China but also with other countries.
Switzerland’s Response to US Tariffs
While the US-China talks were underway, US officials also met with Swiss President Karin Keller-Sutter in Switzerland. The US had previously proposed raising tariffs on Swiss goods to 31%, but Trump paused the increase, leaving the tariff rate at 10%. Swiss officials have expressed concerns about the impact of US tariffs on key Swiss exports, including watches, coffee capsules, cheese, and chocolate.
Despite these concerns, the Swiss government has stated that it does not plan to retaliate against the US at this time. Swiss officials also pointed out that following a tariff cut last year, 99% of US goods now enter Switzerland duty-free.
