The U.S. and China Hint at Trade Deal

May 12th, 2025

Anya Gordeev

The United States and China have reached a preliminary trade agreement after a weekend of intensive negotiations in Geneva. While details remain scarce, both sides described the outcome as a breakthrough in de-escalating their ongoing trade war. It has been announced that a full briefing will be held Monday.

President Trump escalated trade tensions by imposing 145% tariffs on Chinese imports in early April. China retaliated with 125% tariffs on U.S. goods. This effectively halted bilateral trade and hurt overall global markets. This meeting marks the first direct and serious economic engagement between the two countries since President Trump first escalated tensions with the original tariff placed.

The negotiations took place at a private villa in Cologny, Switzerland, and included meetings with Chinese Vice Ministers Li Chenggang and Liao Min. The setting provided a neutral venue, chosen in part due to Swiss diplomatic efforts.

The agreement may signal an important turning point in a conflict that has disrupted global supply chains, driven up prices for consumers, and created harsh market volatility. Financial markets and international observers await the promised Monday statement, which could shed light on whether tariffs will be reduced or structural reforms are included.

Treasury Secretary Scott Bessent called the discussions “productive,” adding that the talks yielded “a great deal.” Trade Representative Jamieson Greer seconded the statement, calling the agreement “very constructive” and a sign that “perhaps the differences were not as large as maybe thought.” Bessent said he and Greer personally briefed President Donald Trump on Saturday night and that the president is “fully informed.”

Chinese He Lifeng said the talks achieved “substantial progress” allowing them to “rea[ch] [an] important consensus.” Lifeng also announced a new bilateral consultation mechanism for trade and economic issues. Chinese Trade Representative Li Chenggang hinted that more details would be revealed in a joint statement. “Good news for the world,” he said, “If the dishes are delicious, then timing is not a matter.”

If the agreement leads to a reduction in tariffs and stabilizes trade, it could provide relief to American manufacturers and farmers that got hit the hardest by the Chinese retaliatory tariffs. Additionally, lower costs on imported goods would help stop the high price pressures. Not only that but, a renewed access to the Chinese market could revive stopped exports which would in turn help President Trump tremendously politically. A stop to the trade war would strengthen Trump’s economic credentials and defuse criticism over the impact of the trade war on U.S. consumers and businesses.