Reuters: Chinese and US delegations returned to the trade talks headquarters in Geneva after a break.

Reuters: Chinese and US delegations returned to the trade talks headquarters in Geneva after a break.

Geneva, Switzerland | May 10, 2025

US and Chinese delegations returned to the trade talks headquarters in Geneva after a break, marking a significant step towards potentially easing trade tensions between the world’s two largest economies. The meeting, which took place on Saturday, is the first official engagement since US President Donald Trump increased tariffs on Chinese goods to as much as 145% [3].

The resumption of talks comes amidst indications that the US is considering a reduction in tariffs on Chinese goods. In a recent post on TruthSocial, Trump stated that 80% tariffs on China "seem right" and that the upcoming negotiations could lead to a "good weekend" with China [2]. This optimism is shared by US Treasury Secretary Scott Bessent, who has indicated that a trade deal is in the works and that de-escalation will be the primary focus [3].

The potential easing of trade tensions between the US and China could have significant implications for the global economy. Chinese exporters may quickly recover due to their superior technical expertise, potentially reducing India’s chances of capitalizing on the current geo-strategic opportunity [1]. Indian manufacturers have expressed concern that a trade deal could weaken the role of Indian suppliers, as Chinese exporters may approach them for help in fulfilling US orders [1].

However, a near-term thaw in US-China relations is unlikely, according to Richard Baldwin, Professor of International Economics at IMD Business School. Baldwin noted that a bipartisan consensus in the US views China as a national security threat, and that the US is not moving closer to China. He expects protracted negotiations to continue throughout the Trump administration, resulting in a continuous trade war [1].

The latest developments in US-China trade relations come as the global economy continues to grapple with the effects of the ongoing trade conflict. Data from China’s Ministry of Commerce showed that while China’s exports to the US fell by over 20% in April, its overall exports rose by 8.1% year-on-year, buoyed by strong performance in the ASEAN region and other markets [1].

In conclusion, the resumption of US-China trade talks in Geneva represents a step towards potentially easing trade tensions. However, the path to a trade deal remains uncertain, and the implications for the global economy are significant. Investors and financial professionals should closely monitor these developments as they unfold.

References:
[1] Mishra, R. D. (2025, May 10). US-China trade deal could help Chinese exporters recover. Indian Express. Retrieved from https://indianexpress.com/article/business/us-china-india-talks-tariffs-geneva-economy-buyers-9994725/
[2] Stocktwits. (2025, May 9). Trump talks up great trade deals in the hopper ahead of Geneva talks. Retrieved from https://stocktwits.com/news-articles/markets/equity/trump-talks-up-great-trade-deals-in-the-hopper-ahead-of-geneva-talks/chiWwJgRblW
[3] Radio Free Asia. (2025, May 7). US and Chinese officials hold high-level talks in Switzerland. Retrieved from https://www.rfa.org/english/china/2025/05/07/china-us-trade-talks-analysis/

Ask Aime: What's next for US-China trade relations?