Trade talks between the U.S. and China held this weekend in Geneva, Switzerland, proved to be highly constructive. The two-day meeting concluded with both nations agreeing to reduce most tariffs to 10% for a period of 90 days. During this time, the U.S. trade delegation—led by Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer—will collaborate with their Chinese counterparts to negotiate what Bessent hopes will be “a long-lasting and durable trade deal.”
A separate 20% tariff, imposed by Trump in response to what he characterized as China’s involvement in the fentanyl trade, will stay in place.
To that point, The Wall Street Journal reported:
In a private meeting on Saturday, Bessent picked up a bit of sugar out of a dish on the table and told Chinese officials that the amount he was holding could kill a person if it were fentanyl, said a person with direct knowledge of the exchange. Bessent picked up a little more sugar and said that amount could kill people across Geneva. Then he picked up more and said that much could kill people across Switzerland.
Speaking to reporters at the White House on Monday, President Trump “confirmed that 25% tariffs on cars, steel and aluminum remain in effect — and duties on pharmaceuticals could still happen,” as per The New York Post.
According to the Journal, Bessent said that talks on a broader deal will begin in the next couple of weeks. He noted that “a clear break between the two economies wasn’t desirable” and that “neither side wants to decouple.”
Bessent said the U.S. still had grave concerns about its unbalanced trading relationship with China. He cited issues such as China’s management of its currency and its subsidies for manufacturing, which Washington believes are a major factor driving factory-job losses in the U.S. Those and other issues will be discussed in talks over the next 90 days, he said.
The outcome forestalls for now what was shaping up to be a destructive clash between the world’s two biggest economies, with potential ripple effects across the globe.
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The prospect of much lower-than-expected tariffs and a 90-day window for further talks open the possibility that the worst damage to the economy may be averted.
Bessent told reporters on Monday, “The Chinese delegation basically told us that once President Biden came into office, they just ignored their obligations.”
This was a far better outcome than most analysts were expecting. In a Friday Truth Social post, Trump mused that an “80% Tariff seems right! Up to Scott.″
Stock market futures soared immediately following the announcement. The momentum carried into Monday. Global stock markets surged and the dollar strengthened in anticipation of stronger GDP growth in the U.S.
Up until the weekend talks in Geneva, the Chinese projected defiance and pride. In fact, just two weeks ago, China’s Ministry of Foreign Affairs released a video titled, “Never Kneel Down!” According to Chinese officials, “bowing to a bully [U.S.] is like drinking poison to quench thirst — it only deepens the crisis.”
But behind the bluster were indications that the Chinese economy was beginning to buckle under the pressure. Reports surfaced of growing worker unrest across China, driven by “production shutdowns and job cuts,” along with a warning from Goldman Sachs that as many as 16 million Chinese workers could soon face unemployment.
A spokesperson for China’s Ministry of Commerce said that Beijing hopes the U.S. will “continue to move forward in the same direction with China, completely correct the erroneous practice of unilateral tariff hikes, and continually strengthen mutually beneficial cooperation.”
Elizabeth writes commentary for Legal Insurrection and The Washington Examiner. She is an academy fellow at The Heritage Foundation. Please follow Elizabeth on LinkedIn or X.
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