In a surprising turn of events, the U.S. and China have reported breakthroughs in high-stakes trade talks held over the weekend in Switzerland. U.S. Treasury Secretary Scott Bessent hailed the discussions as “fruitful and forward-looking,” while China’s Vice Premier He Lifeng called them “thorough” and “straight-shooting.” The White House teased a “trade agreement” but kept the details under wraps, with a full joint statement slated for Monday.
The two nations locked horns in secretive, closed-door meetings—the first face-to-face since President Donald Trump slapped a whopping 145% tariff on Chinese imports in January, prompting Beijing to fire back with 125% duties on select American goods. Those massive tariffs sent shockwaves through global markets, stoking fears of an economic downturn.
But Monday morning brought a wave of optimism. Chinese stocks climbed, with the Shanghai Composite ticking up 0.4% and Hong Kong’s Hang Seng jumping nearly 0.7%. U.S. stock futures surged, signaling a strong Wall Street opening. The Chinese yuan also flexed its muscle against the dollar.
Trade insiders are buzzing. Frank Lavin, a former U.S. Commerce Department bigwig, told the BBC’s Business Today that both sides might trim tariffs, though they’d likely stay “sky-high” compared to historical norms. But Deborah Elms, a trade policy guru at the Hinrich Foundation, pumped the brakes, suggesting the talks might just lead to more talks. “The tit-for-tat tariffs might get a nod, but don’t hold your breath,” she said on BBC’s Newsday.
After two days of intense negotiations in Geneva, U.S. Trade Representative Jamieson Greer boasted that the “deal we hammered out with China” would chip away at America’s $1.2 trillion trade deficit. Bessent echoed the sentiment, saying both sides made “real headway” in cooling the trade war. Vice Premier He called the talks a game-changer, not just for the U.S. and China but for the global economy, revealing plans for a new economic and trade hotline between the two powers.
World Trade Organization chief Ngozi Okonjo-Iweala gave the talks a thumbs-up, urging both nations to “keep the pedal to the metal” to ease tensions and bolster global trade confidence. On Saturday, after day one, President Trump took to social media, calling the talks a “total game-changer” for U.S.-China relations. “We’re pushing for China to open its doors to American businesses—HUGE strides made!!!” he posted.
The trade war kicked into high gear last month when Trump rolled out a universal baseline tariff on all U.S. imports, dubbed “Liberation Day.” China, the EU, and about 60 other trading partners got hit with even steeper rates as “repeat offenders” in Trump’s book. He also tacked on 25% tariffs on steel, aluminum, and auto imports, calling it a long-overdue fix for decades of unfair trade deals.
Ahead of the talks, the White House made it clear: no tariff cuts without China stepping up. Beijing, meanwhile, insisted the U.S. ease its trade chokehold. Chinese state media said the decision to negotiate came after weighing global pressures, national interests, and pleas from U.S. businesses. Last month, Chinese exporters like Sorbo Technology were reeling, with half their U.S.-bound goods gathering dust in warehouses. On the home front, the U.S. economy shrank by 0.3% annually in Q1 as companies scrambled to stockpile goods before tariffs bit harder.