US-China Trade Talks Begin in Geneva Amid Tariff Tensions
| 2025-05-10
Representative image.
The United States and China have launched high-level trade talks in Geneva as both nations face mounting economic pressures from steep reciprocal tariffs.
The meetings, which began on Saturday in Switzerland, mark a rare moment of direct engagement between Washington and Beijing after months of escalating economic conflict. The talks are being led by Chinese Vice Premier He Lifeng and United States Treasury Secretary Scott Bessent, according to Chinese state media.
The discussions come at a critical juncture in the ongoing trade standoff, triggered by the United States’ imposition of tariffs as high as 145% on Chinese imports. China responded with its own countermeasures, levying 125% tariffs on goods from the US. The tit-for-tat measures have sharply curtailed trade between the world’s two largest economies.
While both sides have kept expectations low, the start of formal dialogue has been welcomed as a potential first step toward stabilising an increasingly strained economic relationship.
Economic impact of tariffs
The consequences of the tariff war are already being felt across both nations. In the United States, the elevated cost of Chinese imports has contributed to rising inflation. Analysts at Goldman Sachs estimate that key inflation measures could double to 4% by the end of the year, with import-related price increases already visible in sectors ranging from electronics to household goods.
China’s export sector has also been hit hard. In April, shipments to the US dropped by 21% year-on-year to $33 billion, according to figures cited by CNN. The contraction has raised alarms in Beijing, where policymakers are under pressure to introduce fresh economic stimulus amid declining factory output.
According to the National Retail Federation, US imports are expected to fall by at least 20% in the second half of 2025, with Chinese imports projected to plunge by as much as 80%, based on forecasts by JPMorgan. The drop in trade volume reflects the immediate impact of the tariffs on global supply chains.
Political stakes and strategic tensions
US President Donald Trump has taken a combative stance in recent months, positioning the tariffs as a tool to pressure China into opening its markets and addressing longstanding trade imbalances. On Friday, Trump indicated that he would consider reducing tariffs to 80%, stating on social media that such a rate “seems right,” though he left final decisions to Treasury Secretary Bessent.
China has called on Washington to demonstrate “sincerity” by reversing what it describes as unilateral trade measures. “The US should correct its wrong practices and lift the unilateral tariffs,” China’s commerce ministry said, as quoted by the state-run Global Times. The newspaper also cited a Chinese proverb: “To untie the bell, you need the person who tied the bell,” suggesting that resolution must begin with the US.
The talks are also taking place against the backdrop of US efforts to secure trade agreements with other countries, such as the United Kingdom. Beijing views these moves with concern, seeing them as part of a broader strategy to exclude China from emerging global supply chains, especially in sectors deemed strategic.
Additional flashpoints
Beyond trade, the talks may touch on other sensitive issues. President Trump has said he plans to raise the case of jailed Hong Kong publisher Jimmy Lai during the discussions. Lai, a prominent critic of the Chinese government, is currently facing national security charges that could result in a life sentence.
There is also speculation that the US may press China on its role in the global supply of fentanyl precursors, a subject of growing bipartisan concern in Washington. While not officially confirmed, the possible attendance of China’s public security minister would signal a broader scope for the Geneva talks.
Outlook and expert opinion
Economists remain cautious about the potential for a breakthrough. Eswar Prasad, a former official at the International Monetary Fund, described the resumption of dialogue as “significant progress” but warned that a lasting settlement remains uncertain. “Both the US and China have strong interests in de-escalating their trade hostilities, but a durable détente is hardly in the offing,” he said.
Others suggest that incremental steps, such as reducing tariffs to pre-April levels—around 20%—could pave the way for more constructive negotiations. Wu Xinbo, dean at Fudan University’s Institute of International Studies, noted that Beijing had previously offered to discuss other contentious topics separately, including drug control.
Meanwhile, the World Trade Organization, headquartered in Geneva, has welcomed the talks. The organisation has previously criticised the proliferation of unilateral tariffs and warned that a prolonged economic divide between rival blocs could reduce global GDP by nearly 7% over the long term, disproportionately affecting developing countries.
Context: Global implications
The current standoff between the United States and China is reverberating beyond their borders. With global supply chains increasingly fragmented, many nations—especially in Asia—are becoming indirect conduits for Chinese goods rerouted around US tariffs. China’s trade data shows robust exports to third countries, indicating adaptive strategies to maintain market access.
In a move interpreted as geopolitical signalling, China recently imposed anti-dumping duties of up to 166.2% on an Indian pesticide, Cypermethrin. Observers see this as a message to nations aligning more closely with US trade preferences.
With the Geneva meetings ongoing and no immediate resolution expected, the focus will now shift to whether any initial commitments can lead to broader negotiations—and potentially, to a de-escalation of one of the most consequential trade conflicts in recent history.
India-Pakistan Conflict Sparks Sharp Decline in Indian Stock Markets
Rising India-Pakistan tensions prompted foreign investor selloff, causing the Sensex to drop 880 points and erasing billions in market capitalisation.
|2025-05-10
India-Pakistan Conflict Sparks Market Volatility as Analysts Highlight Resilient Stocks
As tensions rise between India and Pakistan, analysts advise investors to focus on defence, banking, and FMCG stocks, citing resilience and recovery potential.
|2025-05-09
India-Pakistan Tensions Push Sensex Down Nearly 800 Points
Rising India-Pakistan conflict triggers steep losses in Indian stock markets, with Sensex plunging nearly 800 points and Nifty falling below key support levels.
|2025-05-09
Coal India to Supply 4,500 MW Renewable Energy for Green Ammonia Projects
Coal India Limited and AM Green sign MoU to develop 4,500 MW renewable energy for green ammonia production, supporting India's net-zero goals.
|2025-05-09
Tata Motors Shares Climb 3% as UK and US Strike Landmark Trade Deal
Tata Motors stock rose 3% following a new US-UK trade agreement benefiting the auto sector, including reduced car export tariffs and steel duty cuts.
|2025-05-09