Trump Claims Trade Reset With China

President Donald Trump announced a breakthrough in U.S.-China trade relations Saturday, describing the first day of high-level negotiations in Geneva as “a total reset” that was conducted “in a friendly, but constructive, manner” even as details of any concrete agreements remain undisclosed.

The closely watched talks between Treasury Secretary Scott Bessent, U.S. Trade Representative Jamieson Greer, and Chinese Vice Premier He Lifeng marked the first face-to-face meeting between senior officials from the world’s two largest economies since Trump imposed punitive 145% tariffs on Chinese imports in April.

Presidential Optimism Amid Economic Pain

“A very good meeting today with China, in Switzerland. Many things discussed, much agreed to,” Trump posted on his Truth Social platform late Saturday. “We want to see, for the good of both China and the U.S., an opening up of China to American business. GREAT PROGRESS MADE!!!” according to Reuters.

The president’s enthusiastic assessment comes amid growing economic damage from the trade war, with U.S. gross domestic product showing its first quarterly contraction since early 2022 and Chinese exports to the United States plummeting 21% in April compared to the previous year. Investment bank JPMorgan predicts U.S. imports from China could drop by 75-80% in coming months.

Divergent Accounts of Meeting Origins

The path to the Geneva summit has been marked by contradictory accounts from both sides about who initiated the talks, illustrating the political sensitivities and reluctance to appear weak. While Trump previously claimed that Chinese President Xi Jinping had called him, Chinese officials denied this assertion, according to NPR.

Behind Beijing’s decision to come to the negotiating table was mounting economic pressure, with many analysts downgrading China’s 2025 growth forecasts and investment bank Nomura warning the trade war could cost the country up to 16 million jobs. One Chinese official told Reuters that many firms were struggling to replace the U.S. market and faced “an existential threat that needed to be resolved in days or weeks.”

Carefully Managed Expectations

Despite Trump’s positive messaging, both sides have been cautious about expectations for immediate results. Secretary Bessent urged the public earlier in the week “not to expect a major trade deal” from the initial meetings, characterizing them instead as “an important step in negotiations,” according to CNBC.

Chinese officials have maintained a firmer tone, with a Commerce Ministry spokesperson insisting before the talks that “China will not sacrifice principle to reach a deal with the U.S.” and repeating that Washington must “rectify its wrongdoing” by removing all unilateral tariffs. However, analysts suggest China might offer “sweeteners” such as promises to crack down on fentanyl flows to secure relief from the 20% fentanyl-related tariffs Trump imposed.

Neutral Ground For Delicate Diplomacy

The choice of Switzerland as a venue highlights the need for a neutral setting amid heightened tensions. Swiss President Karin Keller-Sutter, who met with both delegations separately on Friday, expressed hope that “the Holy Spirit that had visited Rome this past week — during the election of a new pope — might travel up to Geneva this weekend too, to help nudge things along,” as reported by NPR.

Dmitry Grozoubinski, executive director of the Geneva Trade Platform think tank, cautioned that “this initial set of conversations could merely herald the start of a months-long marathon of negotiations,” noting that “neither side particularly benefits from this current iteration of the trade war continuing.” The talks are set to continue on Sunday at an undisclosed location in Geneva.

Broader Global Implications

The outcome of the U.S.-China negotiations carries significant implications for the global economy, which has been rocked by the trade dispute. The relationship between the two economic superpowers, whose combined economies are larger than the next 20 combined according to World Bank data, will shape global trade patterns, supply chains, and inflation pressures in the coming years.

Financial markets, which have experienced substantial volatility in response to the trade tensions, reacted positively to news of the talks. U.S. equity index futures and stock markets in China and Hong Kong rallied when the meeting was first announced. Observers will be watching closely for concrete details from day two of negotiations and any joint statements that might signal a path toward de-escalation.