High economic authorities from the United States and China meet on Saturday (10) in Geneva for decisive negotiations that can shape the directions of the global economy, already weakened by the trade war triggered by the government of former President Donald Trump.
The meetings, which continue until Sunday, mark the first formal dialogue since the US raised rates on Chinese products to 145%, as it was answered by Beijing with 125% tariffs on US items. Mutual retaliation has practically paralyzed trade between the world’s two largest economies, increasing fears of a global recession.
Despite the importance of meetings, analysts maintain low expectations regarding a concrete advance. The conversations, which took weeks to be scheduled, should mainly serve for both sides to align interests and establish a base for future negotiations.
US Treasury Secretary Scott Bessent leads the American delegation. Former Hedge Funds Manager, Bessent has already stated that current tariff levels are unsustainable. He will be accompanied by Jamieson Greer, commercial representative and architect of Foreign Trade Policy in Trump’s first term. Tudo-line commercial advisor Peter Navarro does not participate in the round.
On the Chinese side, negotiations are led by He Lifeng, vice-prime minister responsible for economic policy. Beijing did not officially reveal those who participate most in the delegation, nor confirmed whether public security minister Wang Xiaohong – who also leads the anti -drug committee – will be present. His eventual participation could signal the inclusion in conversations of the issue of Fentanile trafficking, a sensitive theme for Washington.
Even without high expectations of immediate results, the simple fact that China and the US return to the negotiating table is seen as a positive step. Tariffs have caused real impact on the world economy, changing productive chains and passing costs to consumers.
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Investors and economists closely follow the unfolding of meetings, aware of the possibility that the commercial dispute slows down global growth and increases prices in various sectors. Companies that depend on Chinese imports face uncertainties regarding the duration of tariffs and already signal price increases.
“Both countries have strong economic incentives to reduce commercial tensions, but lasting relief still seems distant,” Eswar Prasad, former director of China’s Division in the IMF, to The New York Times. According to him, the onset of high -level negotiations already represents an important advance and can pave the way for a more moderate rhetoric.
On Friday, Trump indicated a willingness to reduce tariffs, suggesting that a rate of 80% over Chinese imports would be more “proper”. Later, ambiguous, he said, “We have to make a great deal for the US, but it wouldn’t be disappointed either if there is no agreement now.”
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Who will give in?
Trump has reiterated that he will only accept to download rates if China does the same. The White House argues that Beijing unfairly subsidizes key sectors and exports products at artificially low prices. In addition, it pressures the Chinese government to combat the export of Fentanil precursors, a drug responsible for millions of deaths in the US.
Beijing, in turn, insists that he will not give in to tariff pressures and agreed to negotiate only at Washington’s request. Even if the proposal to reduce rates to 80% advance, this level can still be high enough to compromise bilateral trade.
For experts, a possible gesture of goodwill would be to restore tariff levels at the prior level to the measures announced in April, when the US imposed a 34% rate that led to the current climbing. “If we can return to that point, it would be a real progress to resume more constructive negotiations,” says Wu Xinbo, director of the Institute of International Studies at Fudan University.
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According to calculations in the capital Economics, if US tariffs fell to 54%, the average rate on imports would retreat from 23%to 15%, which could align growth and inflation projections with estimated levels at the beginning of the year.
It is not yet known if Trump would accept a reduction to 54%. On Friday, he said a 80% rate “looks right,” but his spokesman Karoline Leavitt said the number was casually mentioned and does not represent a formal proposal.
