Geneva, May 7 — Top trade officials from the United States and China are set to hold in-person talks in Geneva this week in a bid to de-escalate a bruising trade war that has triggered steep tariffs, disrupted global commerce, and raised recession fears. U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will lead the American delegation, marking the first direct negotiations between the two sides since tit-for-tat tariffs were ratcheted up in March.
The talks are not expected to yield a comprehensive trade agreement, Bessent said on Tuesday, but may lay the groundwork for future negotiations and a possible pause in tariff increases.
“The main objective of this meeting is to establish the conditions for a deal to be reached, including by defining what is feasible to be agreed upon and what isn’t,” said Alfredo Montufar-Helu of the Conference Board’s China Center.
The U.S. has slapped tariffs of at least 145% on most Chinese imports, while China has retaliated with 125% duties on certain U.S. goods. The escalation has caused bilateral trade to slump and triggered warnings from economists about broader economic fallout.
China-bound shipments to the U.S. dropped 60% in April, according to logistics firm Flexport, while Chinese imports are forecast to plunge by as much as 80% in the second half of the year, JPMorgan estimates. At the Port of Los Angeles, cargo volume is down 35% year-on-year.
“The cargo ships coming in are the first ones subject to the new tariffs,” said Gene Seroka, the port’s executive director. “That’s why the volume is so light.”
The U.S. economy contracted in the first quarter for the first time in three years, while China’s factory output shrank at its fastest pace in 16 months. Beijing’s central bank announced a 0.5 percentage point cut in reserve requirements for banks and lowered a key policy rate to boost liquidity.
Despite the tensions, both sides have signaled the need to ease hostilities. President Donald Trump last week acknowledged the tariffs were “too high” and hinted at eventual relief. China, while rejecting coercive tactics, has said it is open to dialogue based on “equality, respect, and mutual benefit”.
The trade war has not been limited to China. The U.S. has also imposed a 10% universal tariff on virtually all imports and additional duties on steel, aluminum, and automotive products from countries including Canada and Mexico.
Global institutions including the IMF and World Bank have warned the trade tensions could severely damage global growth and fuel inflation. Wall Street rallied on news of the Geneva talks, with the Dow rising over 300 points and S&P 500 and Nasdaq futures up nearly 0.7%.
Still, both sides remain far from a resolution. “This will be about de-escalation, not the big trade deal,” Bessent said. “But we’ve got to de-escalate before we can move forward.”
President Trump struck a cautiously optimistic note in a recent interview: “At some point, I’m going to lower [tariffs] because otherwise you could never do business with them. They want to do business very much… their economy is collapsing.”
