Volkswacht Bodensee - Trump hails 'total reset' in US-China trade relations as talks continue

In a Truth Social post early Sunday, Trump praised the "very good" discussions and deemed them "a total reset negotiated in a friendly, but constructive, manner."

The second day of closed-door meetings between US Treasury Secretary Scott Bessent, Trade Representative Jamieson Greer and Chinese Vice Premier He Lifeng are due to restart in the morning, according to an individual familiar with the talks who was not authorized to speak publicly.

"These talks reflect that the current state of the trade relations with these extremely high tariffs is ultimately in the interests of neither the United States nor China," Citigroup global chief economist Nathan Sheets told AFP.

The discussions are the first time senior officials from the world's two largest economies have met face-to-face to tackle the thorny topic of trade since Trump slapped steep new levies on China last month, sparking robust retaliation from Beijing.

The levies imposed by Trump on the Asian manufacturing giant since the start of the year currently total 145 percent, with cumulative US duties on some Chinese goods reaching a staggering 245 percent.

In retaliation, China put 125 percent tariffs on US goods, cementing what appears to be a near trade embargo between the two countries.

"This is a lose-lose proposition to have tariffs this high," said Sheets, formerly the US Treasury's under secretary for international affairs.

Ahead of the meeting, Trump signaled he might lower the tariffs, suggesting on social media that an "80% Tariff on China seems right!"

However, his press secretary Karoline Leavitt later clarified that the United States would not lower tariffs unilaterally, and that China would also need to make concessions.

- 'An important step' -

The first day of negotiations took place Saturday at the residence of the Swiss ambassador to the United Nations in Geneva, a discrete villa with sky blue shutters near a large park on the left bank of Lake Geneva.

Going into the meeting, both sides played down expectations of a major change in trade relations, with Bessent saying they would focus on "de-escalation" and not a "big trade deal," and Beijing insisting the United States must ease tariffs first.

A commentary published by China's state news agency Xinhua called the talks "an important step in promoting the resolution of the issue."

The fact the talks are happening at all "is good news for business, and for the financial markets," said Gary Huffbauer, a senior non-resident fellow at the Peterson Institute for International Economics (PIIE).

But Huffbauer cautioned he was "very skeptical that there will be any return to something like normal US-China trade relations," with even a tariff rate of 70 to 80 percent still potentially halving bilateral trade.

- China 'better-equipped' -

China's vice premier went into the discussions buoyed by Friday's news that China's exports rose last month despite the trade war.

The unexpected development was attributed by experts to a re-routing of trade to Southeast Asia to mitigate US tariffs.

Among some of the more moderate Trump officials like Bessent and Commerce Secretary Howard Lutnick, "there's a realization that China is better equipped to deal with this trade war than the US," said Huffbauer.

The Geneva meeting comes after Trump unveiled a trade agreement with Britain, the first deal with any country since he unleashed his blitz of sweeping global tariffs.

The five-page, non-binding deal confirmed to nervous investors that the United States is willing to negotiate sector-specific relief from recent duties, but kept in place a 10 percent baseline levy on most British goods.

Following the US-UK trade announcement, analysts have voiced pessimism about the chances of any significant changes to the US-China trade relationship following the talks in Geneva.

"I think it's quite possible they'll walk away from Geneva saying how constructive and productive the talks were, but not actually reducing tariffs at all," Huffbauer said.

In his Truth Social post late Saturday in Washington, Trump said the two sides had made "GREAT PROGRESS!!"

"We want to see, for the good of both China and the U.S., an opening up of China to American business," he added.

A.Ruegg--VB