US And China Officials To Meet Amid Trade Dispute, Sparking Hopes Of Resolution
Top US and Chinese officials are scheduled to meet in Geneva on Saturday in what is being described as a tentative first step toward thawing trade tensions that have rattled the global economy.
US Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will sit down with China's economic chief He Lifeng, marking the first high-level engagement between the two economic giants since March, reported Reuters.
The announcement, made by Washington late Tuesday, triggered a surge in investor confidence. This meeting comes at a critical juncture, after weeks of growing friction between the United States and China.
The trade conflict has escalated rapidly, with both countries imposing tariffs exceeding 100 per cent on each other’s goods. Bessent, speaking on Tuesday, likened the situation to a full-blown “trade embargo,” underscoring the severity of the standoff.
Trade Barriers and Tariff Talks on the Table
Citing sources familiar with the meeting preparations, Reuters revealed that the discussions will likely center around reducing tariffs, including those on specific product categories. The talks are also expected to address broader trade restrictions, export controls, and a contentious US move to revoke de minimis exemptions on low-value imports. One insider noted that these issues will be part of a wider effort to lower tensions, the report said.
Bessent expressed cautious optimism, telling Fox News, “My sense is this will be about de-escalation. We've got to de-escalate before we can move forward.”
Beijing, which previously refused to negotiate unless US tariffs were rolled back, appeared to soften its stance. A spokesperson from China’s commerce ministry confirmed the country's participation, citing global expectations, domestic interests, and input from US businesses and consumers. “On the basis of fully considering global expectations, China's interests, and the appeals of US industry and consumers, China has decided to re-engage the US,” the spokesperson stated, referencing a proverb to emphasise action over words.
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Signs of Economic Pressure on China
While China's foreign ministry reiterated its opposition to what it views as the US's misuse of tariffs, the decision to attend the Geneva talks indicates a potential shift in strategy. Lin Jian, a spokesperson, emphasised at a Wednesday briefing that “Beijing's position of firmly opposing US abuse of tariffs has not changed,” suggesting that the decision to participate does not indicate a reversal in principle.
China's economy, however, is under mounting strain. The country’s massive manufacturing sector is bearing the brunt of the ongoing tariff battle. Analysts have slashed growth forecasts for 2025, and Nomura has projected that the conflict could lead to the loss of up to 16 million jobs in China.
In a move widely seen as a buffer against economic fallout, China's central bank announced a new round of monetary stimulus on Wednesday, including rate cuts and additional liquidity for banks. “There’s almost certainly also an element of signalling to the US government ahead of the upcoming meeting,” said Christopher Beddor, deputy China research director at Gavekal Dragonomics. “The message is that Chinese officials are not panicked or scrambling to shore up economic growth, and they’re not going to be negotiating from a position of weakness.”
Ongoing Global Trade Reconfigurations
The US has stepped up diplomatic engagement with multiple trade partners following President Donald Trump’s April 2 announcement of a sweeping 10 per cent tariff on most countries, effective July 9, unless individual deals are reached. Additional duties include 25 per cent tariffs on autos, steel, and aluminium, with specific levies of 25 per cent on Canada and Mexico, and 145 per cent on Chinese imports. Further tariffs on pharmaceuticals are reportedly in the pipeline.
In retaliation, China raised its tariffs on US products to 125 per cent, and the European Union is preparing countermeasures of its own. Despite Saturday’s meeting aiming to reduce hostilities, uncertainty looms. “For more comprehensive geopolitical negotiations to be possible, tariffs would need to be lowered first,” said Bo Zhengyuan of policy consultancy Plenum.
Bessent reinforced the need for a reset: “Look, we have a shared interest that this isn't sustainable,” he said. “And 145 per cent, 125 per cent is the equivalent of an embargo. We don't want to decouple. What we want is fair trade.”
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