United States and China start tariff talks in Geneva

US Treasury Secretary Scott Bessent is present in Geneva for the tariff talks with Chinese officials. Keystone-SDA

The United States and China have started talks in Geneva aiming to de-escalate a dispute that threatens to cut off trade between the world’s two biggest economies and damage the global economy.

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On Saturday morning, US Treasury Secretary Scott Bessent met with the Chinese Vice Premier in charge of the economy, He Lifeng.

The talks began mid-morning, a source close to the discussions told the Keystone-ATS news agency. US Trade Representative Jamieson Greer is also in Geneva.

According to convergent sources, few details are expected to emerge from Geneva. The site of the meeting is being kept secret. Any announcements could come directly from Washington or Beijing, even though the talks are scheduled to last until Sunday.

However, Bessent warned that we should not expect a major trade agreement with Beijing by the end of the weekend. But rather an initial “de-escalation” approach.

The United States could also seek to divert attention from the real differences by demanding that China make efforts regarding the export of components used in the manufacture of fentanyl. Fentanyl is a drug that US President Donald Trump has declared war on, given the extent to which it is undermining the country.

China in a position of strength

After several weeks of responses in the form of additional tariffs between the two countries, the taxes have reached 145%, and even 245% for certain goods, on Chinese exports to the US. They are 125% for American goods to China.

On Friday, however, the head of the White House hinted that customs duties on Chinese products could be reduced to 80% if progress was made in Geneva. After an agreement with London on Thursday and an acceleration of talks with Switzerland on Friday, the United States is seeking to calm a situation that is affecting the global economy.

Beijing, for its part, announced stimulus measures on Wednesday ahead of the meeting with Washington, including interest rate cuts and a major injection of liquidity. From a position of strength, China, which claims that the meeting is being held at Washington’s request, announced on Friday that its exports rose by 8.1% in April. But exports to the United States fell by around 18%.

In recent days, Switzerland has repeatedly expressed its delight at the success of the country’s good office via Swiss President Karin Keller-Sutter. However, Bern has declined to comment on the content, as it is not directly involved in the discussions.

Important for all countries

The Swiss president and Economics Minister Guy Parmelin met separately on Friday with all the officials present in Geneva. Parmelin said that an improvement between the two parties would be good for “the whole world”.

Almost equally cautious, the Director-General of the World Trade Organisation (WTO) Ngozi Okonjo-Iweala welcomed a “positive and constructive step” in this dialogue between the powers that be. The institution warns of the lasting effects if world trade were to be fragmented into two competing blocs.

This approach could cause real Gross Domestic Product (GDP) to contract by 7%. And the organisation recently forecast a decline in world trade this year of between 0.2% and 1.5%, depending on the tensions.

Translated from French by DeepL/sb

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