The Swiss-Bulks War for the U.S. and China: A High-Energy Breaking Moment of China’s Disagreement

GENEVA — The U.S. and China have agreed to significantly reduce tariffs imposed just weeks before on each other’s goods, after negotiators from both countries met over the weekend for trade talks in Switzerland, adding yet another dramatic turn in a dispute that has roiled financial markets and rocked the global economy in recent weeks.

U.S. Treasury Secretary Scott Bessent said Sunday evening that the two sides had made what he called “substantial progress,” but that more details would be announced Monday.

But He, as the senior Chinese official leading his delegation, acknowledged that sources of friction remained, while describing the conversations as collegial and professional throughout the course of the weekend.

The discussions started early Saturday morning in a villa owned by the Swiss government, with sweeping views of a sun-lashed Lake Geneva. Bessent said on the villa’s front steps that the conversations were productive and that the president was kept up to date with developments.

The speed at which both sides found common ground was highlighted by Jamieson Greer, who joined the U.S. delegation.

“It’s important to understand how quickly we were able to come to agreement,” said Greer. He said that it was something, which indicated that the differences were not large as had been thought.

Kevin Hassett, director of the National Economic Council, and Commerce Secretary Howard Lutnick were two of the Trump administration officials who spoke to television Sunday about the positive tone of the talks.

He spoke inside his country’s mission to the World Trade Organization. Senior Chinese officials have said many times that China was not afraid and would fight to the end, even though Beijing did not like the trade war that President Trump created.

Australia’s trade war with China is likely to come back to normal, said a former diplomat and trade negotiator Dmitry Grozoubinski

After several weeks of financial turmoil, investors are likely to respond positively to this new development as a sign that the disruption to trade between the two countries could come back to normal.

There’s no reason to read too much tea leaves according to a former Australian trade negotiator. “It’s most likely that they both agreed on what to cover in their conversation and which topics to talk about.”

China is a major manufacturing hub and the United States is a consumption economy, but are they going to work together to balance the nature of the global economy? “No, I don’t think so, I was an Australian diplomat and trade negotiater.” said former Australian diplomat and trade negotiater Dmitry Grozoubinski. “But is there things the two sides can do for one another that would make both sides happy, at least a little bit? Certainly, there must be.

The United States says it is now negotiating with China to purchase more American goods, reminiscent of a deal the Trump administration made with China during the trade war in 2020. However, China ended up purchasing none of the additional $200 billion in goods that the U.S. said they would.

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“While the Chamber is encouraged by the decision, uncertainty remains,” said Jens Eskelund, president of the European Union Chamber of Commerce in China. Businesses need predictability in order to make investment decisions.

In April, when the world’s two biggest economies retaliated against each other, the tariffs that had been set at eye-watering had effectively paralyzed trade between the world’s two largest economies and shocked consumers and small businesses in the US. The temporary tariffs are welcomed by importers but could be pulled if talks sour between the two countries.

Bessent believes both sides are committed to achieving a more balanced trade.

The Chinese “came to deal this week,” said Greer, citing rapid progress between the two countries, which have also agreed to establish a consultation mechanism to continue addressing trade issues going forward.

American levies on Chinese goods will drop from at least 145% to a base levy of 30% for an initial period of 90 days, while Chinese levies are set to fall from at least 125% to 10% on American goods.

The Chinese vice premier oversaw the talks while the US treasury secretary and trade representative oversaw the talks in the US.

“We concluded that we have shared interest and we both have an interest in balanced trade,” Bessent said at a press conference on Monday. There is a path forward on how to address the problem of Fentanyl Smuggling.

“China has always pursuing win-win outcomes in its trade and economic negotiations, and therefore any possible deal to be reached will definitely by in the development interest of China’s own,” said Li Chenggang, a diplomat with China’s commerce ministry.

At a press conference following the meeting, the vice premier said that the meeting had achieved ” substantial progress and reached important consensus”.