High-level trade negotiations between the United States and China have officially begun in Geneva, Switzerland, aiming to ease tensions in the ongoing trade war triggered by former President Donald Trump’s heavy tariffs.
Leading the Chinese delegation is Vice Premier He Lifeng, while the US Treasury Secretary Scott Bessent heads the American side. Chinese state media confirmed the start of talks on Saturday, calling it a positive step toward resolving the trade conflict.
No Major Deal Expected — Yet
While Bessent warned earlier not to expect a breakthrough trade deal, he acknowledged that these talks are an important move toward progress. The US has placed tariffs of at least 145% on most Chinese goods, and in response, China has imposed 125% tariffs on US products. Experts say even cutting these rates by half may not be enough to restore normal trade levels.
Trump Pushes for 80% Tariffs
Just before the talks began, Donald Trump suggested lowering tariffs to 80%—still high—while demanding that China open its markets more to US businesses. On his Truth Social platform, he posted:
“80% Tariff on China seems right! Up to Scott B.”
Inflation and Falling Imports
The impact of this trade war is already hitting American consumers. Goldman Sachs forecasts that inflation could reach 4% by the end of 2025. Prices are rising because fewer goods are coming in, and those that do are more expensive due to the tariffs.
Many everyday items — from clothing and appliances to toys and electronics — are imported from China. But now, US imports are expected to drop by 20% in the second half of 2025. Imports from China specifically could fall by as much as 80%, according to JPMorgan.
Economic Impact on Both Nations
The US economy has already felt the effects. GDP contracted in the most recent quarter — the first drop since 2022 — as companies rushed to import goods before the steep tariffs took effect.
In China, the situation is also serious. Exports to the US dropped by 21% in April 2025 compared to the same month last year. Chinese manufacturing activity is shrinking at its fastest rate in 16 months, pushing Beijing to consider new economic stimulus measures.
Hopes for Diplomatic Progress
The meetings in Geneva have sparked hope for reduced tensions between the world’s two largest economies. According to World Bank data, the US and China together are larger than the next 20 global economies combined.
President Trump also mentioned that he would raise the issue of Hong Kong media figure Jimmy Lai, who is facing trial under national security laws in China. It’s unclear if his case will be part of the official discussions.
