WASHINGTON/BEIJING, May 7 — United States (US) Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet China's economic tsar He Lifeng in Switzerland this weekend for talks that could be the first step toward resolving a trade war disrupting the global economy.
News of the meeting, first announced by Washington late Tuesday, sent US equity index futures higher, while stock markets in China and Hong Kong followed suit during Asian trading on Wednesday.
The talks come after weeks of escalating tensions, during which duties on goods imports between the world's two largest economies have soared well beyond 100 per cent, amounting to what Bessent on Tuesday described as the equivalent of a trade embargo.
The impasse, alongside US President Donald Trump's decision last month to slap sweeping duties on dozens of other countries, has upended supply chains, roiled financial markets and stoked fears of a sharp downturn in global growth.
Two sources familiar with the planning told Reuters that the negotiating teams convening in Geneva are expected to discuss reductions to the broader tariffs. The two sides are also expected to discuss duties on specific products, US export controls, and Trump's decision to end de minimis exemptions on low-value imports.
China's State Council did not immediately reply to a faxed request for comment.
"My sense is this will be about de-escalation. We have got to de-escalate before we can move forward," Bessent told Fox News after the announcement.
A Chinese Commerce Ministry spokesperson later confirmed that China had agreed to meet the US envoys.
"On the basis of fully considering global expectations, China's interests, and the appeals of US industry and consumers, China has decided to re-engage the US
"There is an old Chinese saying: Listen to what is said, and watch what is done. ... If (the US) says one thing but then does another, or attempts to use talks as a cover to continue coercion and blackmail, China will never agree," the spokesperson said.
This is the first meeting between senior Chinese and US officials since US Senator Steve Daines met Premier Li Qiang in Beijing in March.
Beijing has largely adopted a fiery rhetoric as tensions with Washington have ratcheted up, repeatedly saying it would not engage in negotiations unless the tariffs were withdrawn.
However, signalling a change in tack, on Friday, China's commerce ministry said it was "evaluating" a Washington offer to hold talks.
The stakes for China's economy are high, with its vast factory sector already bearing the brunt of the tariffs. Many analysts have downgraded their 2025 economic growth forecast for the Asian giant, while investment bank Nomura has warned the trade war could cost China up to 16 million jobs.
On Wednesday, China's central bank announced a fresh monetary stimulus, flagging rate cuts and a liquidity injection into the banking system to counter the duties' economic impact.
Analysts described the move as measured and tactical.
"There is almost certainly also an element of signalling to the US government ahead of the upcoming meeting.
"The message is that Chinese officials are not panicked or scrambling to shore up economic growth, and they’re not going to be negotiating from a position of weakness," said Gavekal Dragonomics' deputy China research director Christopher Beddor.
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A United States (US) flag flutters near Chinese shipping containers at the Port of Los Angeles, in San Pedro, California, the US, on May 1, 2025. — Picture by REUTERS[/caption]
Mixed signals
US officials have held a flurry of meetings with trading partners since the president announced a 10 per cent tariff on most countries on April 2, along with higher tariff rates that will kick in on July 9, barring separate trade agreements.
Trump has also imposed 25 per cent tariffs on autos, steel, and aluminium, 25 per cent tariffs on Canada and Mexico, and 145 per cent tariffs on China. Further duties are expected on pharmaceuticals in the coming weeks.
China retaliated by boosting its tariffs on US goods to 125 per cent. The European Union is also readying countermeasures.
While Saturday's talks are aimed at easing tensions, it remains unclear how substantive they could prove, said Shanghai-based policy consultancy Plenum's partner Bo Zhengyuan.
"For more comprehensive geopolitical negotiations to be possible, tariffs would need to be lowered first — the key is whether both sides can agree on the extent and scope of tariff rollbacks, as well as on follow-up talks," he said.
Bessent told Fox News that the two sides would decide "what to talk about" during their meeting on Saturday.
"Look, we have a shared interest that this is not sustainable. And 145 per cent, 125 per cent is the equivalent of an embargo.
"We do not want to decouple. What we want is fair trade," he said.
Trump and his trade team have sent mixed signals about progress in talks with major trading partners, who are rushing to cement agreements with Washington and avoid the imposition of hefty import taxes on their goods.
Earlier in the day, Bessent told lawmakers that the Trump administration was negotiating with 17 major trading partners and could announce trade agreements with some of them as early as this week.
Before a meeting with Canadian Prime Minister Mark Carney, Trump told the press that he and top administration officials will review potential trade deals over the next two weeks to decide which ones to accept.
The US and the United Kingdom (UK) have made progress towards a trade deal, a UK official said, while Bessent has said many other countries, including Indonesia, have made good offers to reduce tariffs and non-tariff barriers, like subsidies.
Trump's tariff moves, which he says are aimed in part at reducing the US trade deficit, have so far had the opposite effect. The gap hit a record in March as businesses rushed to import goods ahead of the levies.
Notably, the US trade deficit with China narrowed sharply as the crushing levies Trump has imposed cut deeply into Chinese imports.
— Reuters
