Geneva, May 12 – Talks between the United States and China aimed at de-escalating trade tensions entered their second day on Sunday, with both sides expressing cautious optimism, but little expectation of an immediate breakthrough on resolving the ongoing tariff dispute.
U.S. Commerce Secretary Howard Lutnick told CNN that the discussions, held in a closed-door setting at the residence of the Swiss Ambassador to the United Nations, had been productive. “We are optimistic that things will work out well,” Lutnick said, adding that the talks were “really important” for both sides.
President Donald Trump also weighed in on social media, describing the first day of negotiations as “very good” and praising the talks as a “total reset negotiated in a friendly, but constructive manner.”
However, Chinese state news agency Xinhua remained silent on Sunday, with no further official comment from Beijing. On Saturday, Xinhua had referred to the talks as “an important step in promoting the resolution of the issue.”
The high-level meetings, which are the first direct face-to-face negotiations between top U.S. and Chinese officials since Trump’s aggressive tariff rollout, involve U.S. Treasury Secretary Scott Bessent, Trade Representative Jamieson Greer, and Chinese Vice Premier He Lifeng.
The talks come amid soaring tensions between the two largest economies, with Trump imposing tariffs of up to 245% on Chinese goods since the start of the year, triggering retaliatory tariffs from China, some of which reach 125% on U.S. products.
Citigroup’s Nathan Sheets described the tariffs as a “lose-lose proposition” for both countries, noting that the current tariff structure is damaging for both economies.
In the lead-up to the meeting, President Trump had hinted at potentially reducing the tariffs, suggesting on social media that an 80% tariff on China could be appropriate. However, his press secretary, Karoline Leavitt, clarified that the United States would not reduce tariffs unilaterally, and that China would need to make concessions as well.
Despite the relatively low expectations for a major shift in trade relations, Gary Hufbauer, senior fellow at the Peterson Institute for International Economics (PIIE), noted that the fact the talks are happening is still positive news for businesses and financial markets. However, Hufbauer expressed doubt that there would be a return to normal U.S.-China trade relations, suggesting that even a 70-80% tariff rate would likely halve bilateral trade.
The talks, which aim primarily at de-escalation, rather than a comprehensive trade deal, reflect the growing realization that the current trade war is detrimental to both countries. As the meetings continue into Sunday, the world’s two largest economies are under increasing pressure to find common ground, with financial markets closely monitoring developments.
