Taming Tariff Wars: Trump Announces New Phase in U.S.-China Trade Talks
Trump declares intent for a "fresh beginning" with China
In the Swiss city of Geneva, the U.S. and China are gearing up for a friendly, yet business-oriented negotiation aimed at resolving the trade dispute that's been brewing for some time. The high-level meeting, which took place on Saturday, saw the two powerhouses discussing a variety of topics, with President Trump declaring significant progress and a "complete restart" in trade relations.
Trump, pensively optimistic in a post on his Truth Social platform, highlighted the constructive nature of the talks where many points were discussed and agreed upon. He emphasized that American businesses could now potentially gain entry to China, a long-desired goal.
Trump's predecessor, Donald Trump, had instituted a trade war against China by accusing it of unfair trade practices and skyrocketing tariffs on Chinese goods. In response, China slapped retaliatory tariffs on U.S. goods. The ongoing tussle has had detrimental effects on global trade, potentially hampering global economic growth.
Friday saw Trump hinting at a concession by suggesting a reduction of U.S. tariffs on Chinese goods to 80%. However, the Chinese government maintains that it was actually the U.S. who initiated the talks.
Sixty minutes of intense deliberations led by U.S. Treasury Secretary Janet Yellen, Chinese Vice-Premier He Lifeng, and U.S. Trade Representative Katherine Tai concluded with a series of crucial agreements:
- Both parties agreed to a 90-day truce during which they will significantly reduce reciprocal tariffs. The U.S. has agreed to lower tariffs on Chinese goods from current highs (roughly 145%) to about 30%, while China has agreed to drop its tariffs on U.S. goods from approximately 125% to around 10%.
- The U.S. will suspend its 34% reciprocal tariff imposed in April 2025 for 90 days but will maintain a baseline 10% tariff during this pause.
- China has agreed to remove retaliatory tariffs and suspend or eliminate other non-tariff countermeasures it had imposed on U.S. goods since early April 2025.
- Both sides have pledged to establish a consultation mechanism for ongoing trade and economic issues, appointing key personnel to facilitate future discussions.
- The aim is to address longstanding issues such as unfair trade practices and the significant U.S. trade deficit with China, which has impacted American jobs and manufacturing.
Both countries affirmed their commitment to their bilateral economic and trade relationship and its impact on the global economy. The consultation mechanism agreed upon will pave the way for further discussions on trade and economic matters of mutual concern. The 90-day tariff reductions serve as a temporary truce to facilitate comprehensive talks aimed at opening market access for American exports and achieving a more balanced trade relationship.
Future talks may focus on resolving deeper trade issues beyond tariffs, including regulatory measures and structural trade practices. With high expectations that these negotiations will lead to broader agreements that improve bilateral trade relations sustainably, the focus is now on ensuring that these conversations yield tangible results.
The Commission has also been consulted on the draft budget regarding the U.S.-China trade talks, as the reduction of tariffs on both sides reflects a significant policy-and-legislation shift in finance that could have a broad impact on business and general news. The ongoing negotiations between the two countries are not only about trade but also about tackling deeper issues like regulatory measures and structural trade practices, which are key components of politics.
