The United States signalled optimism Saturday as high-level trade negotiations with China continued for a second day in Geneva, marking the first direct talks since President Donald Trump imposed steep tariffs that reignited tensions between the world’s two largest economies.
U.S. Commerce Secretary Howard Lutnick told CNN the administration was “optimistic that things will work out well,” echoing earlier remarks by President Trump, who described the initial discussions as a “total reset” conducted in a “friendly, but constructive” tone.
The talks are being held behind closed doors at the residence of the Swiss ambassador to the United Nations, where U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are meeting with Chinese Vice Premier He Lifeng. Chinese officials have yet to comment publicly, but state-run Xinhua news agency called the talks “an important step” toward resolving the ongoing dispute.
This round of negotiations follows months of escalating tariffs, with the U.S. now imposing duties of up to 245% on certain Chinese imports. In response, China has levied tariffs of up to 125% on U.S. goods. The sharply rising trade barriers have sparked fears of a prolonged economic standoff that could have global ramifications.
Citigroup’s global chief economist Nathan Sheets characterized the tariffs as a “lose-lose proposition,” arguing that both nations are incurring significant economic damage. “The current state of trade relations serves neither side’s interests,” he said.
While President Trump hinted at a potential reduction in tariffs—suggesting that an “80% tariff on China seems right”—White House Press Secretary Karoline Leavitt later clarified that any rollback would be contingent on reciprocal concessions from Beijing.
Officials from both countries tempered expectations ahead of the talks. Secretary Bessent emphasized a goal of “de-escalation,” not a comprehensive agreement, while China insisted any meaningful progress would depend on the U.S. easing its tariff regime.
Despite the limited scope, economists see the resumption of dialogue as a positive sign for business and investor confidence. “The fact these talks are happening at all is good news,” said Gary Hufbauer of the Peterson Institute for International Economics. However, he cautioned against expecting a return to pre-trade war conditions, even if tariff levels are significantly reduced.
The talks come on the heels of a modest trade agreement between the U.S. and the UK, which offered sector-specific relief but maintained a 10% baseline levy on most British goods.
Meanwhile, China’s export data showed unexpected resilience, driven by re-routed trade through Southeast Asia—a sign, experts say, that Beijing may be better positioned to weather a prolonged standoff.
While President Trump later declared the Geneva talks had made “GREAT PROGRESS!!” on his Truth Social platform, many analysts remain skeptical about any immediate breakthrough. “It’s encouraging they’re talking,” said Sheets, “but expectations for this first round should remain modest.”
