The first day of talks between top American and Chinese officials in Geneva aimed at defusing a trade war sparked by the Trump administration’s tariff rollout has ended with promising discussions, according to US President Donald Trump. The outcome will have far-reaching implications for global trade and the economy.
The first day of talks between top American and Chinese officials in Geneva aimed at defusing a trade war sparked by the ‘tariff rollout’ has ended with ‘very good’ discussions, according to US President Donald Trump. The talks, which took place at the residence of Switzerland‘s ambassador to the UN, were seen as a positive step towards resolving disagreements between the two economic giants.
The US-China trade war began in 2018 with tariffs imposed by the 'United States' on Chinese goods.
China retaliated with its own tariffs, escalating the conflict.
The dispute involves intellectual property theft, technology transfer, and market access.
According to a study, the trade war has cost the US economy $68 billion annually since 2018.
The conflict also affects global supply chains, with many countries experiencing economic losses due to reduced trade volumes.
The trade dispute between the US and China has brought nearly $600bn in annual bilateral trade to a virtual standstill, disrupting supply chains, unsettling financial markets, and stoking fears of a sharp global downturn. The US is seeking to reduce its $295bn goods trade deficit with Beijing and persuade China to renounce what the US says is a mercantilist economic model and contribute more to global consumption.
Trump’s tariffs imposed on China currently total 145%, with cumulative US duties on some Chinese goods reaching 245%. China has slapped retaliatory levies of 125% on US goods, cementing what appears to be a near trade embargo between the two countries. The US president praised the ‘very good’ discussions and deemed them ‘a total reset negotiated in a friendly, but constructive, manner‘. However, economic analysts have low expectations of a breakthrough, with Trump suggesting for the first time a specific alternative to the 145% levies – an 80% tariff on Chinese goods.
In 2018, President Donald Trump introduced tariffs on imported steel and aluminum to protect American industries.
The tariffs were set at 25% for steel and 10% for aluminum.
The move was met with both domestic and international criticism, as many countries retaliated with their own tariffs.
According to the U.S. Census Bureau, the tariffs led to a 7.5% decline in imports of steel and a 4.6% decline in imports of aluminum.
The tariffs were part of Trump's broader trade agenda aimed at reducing America's trade deficit.
Neither side made any statements afterwards about the substance of the discussions nor signalled any specific progress towards reducing the crushing tariffs. The talks are expected to continue on Sunday, with top officials from both sides meeting at the residence of Switzerland‘s ambassador to the UN. The location of the talks was never made public, but witnesses saw both delegations returning after a lunch break to the gated UN ambassador’s villa in Cologny. The Swiss economy minister said that if a road map can emerge and they decide to continue discussions, that will lower tensions.
The outcome of these talks will have far-reaching implications for global trade and the economy. As the world’s two largest economies, the US and China are critical players in shaping the global economic order. The negotiations represent ‘a positive and necessary step to resolve disagreements and avert further escalation‘, according to China’s official Xinhua news agency. However, much work remains to be done to address the underlying issues driving the trade dispute.
The United States and China have been vying for global influence since the end of 'World War II.'
The US emerged as a superpower, while China's economic reforms in the late 1970s began its ascent.
Today, both nations are among the world's largest economies, with significant diplomatic and military presence globally.
The US maintains alliances with NATO and Japan, while China has expanded its 'Belt and Road Initiative (BRI)' to over 100 countries.
Both nations have also invested heavily in emerging technologies like AI and renewable energy.
