US, China wrap up trade talks with promising signals on reducing deficits

The US and China concluded two days of high-stakes trade talks on Sunday with both sides touting progress, though details remain under wraps, reports Reuters.

US officials claimed that the discussions produced a "deal" aimed at reducing the nation's $1.2 trillion global goods trade deficit, while Chinese negotiators described the outcome as having reached "important consensus".

Key developments

The negotiations, held in Geneva at a gated villa in the leafy suburb of Cologny overlooking Lake Geneva, featured senior economic officials from both sides. 

US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer spoke of "substantial progress" and emphasised that details would be announced on Monday in a joint statement. 

Chinese Vice Premier He Lifeng similarly characterised the talks as "candid, in-depth and constructive" and confirmed that a statement would be issued by the Chinese side from the WTO office.

Standoff on tariffs

Despite the optimistic tone surrounding the talks, no agreement was reached on the contentious issue of tariffs. 

Neither the US tariffs—peaking at 145 percent on Chinese goods—nor China's retaliatory 125 percent tariffs on US goods were set for reduction during these sessions. 

US officials have previously criticised these high duties as tantamount to a trade embargo, arguing that de-escalation is necessary.

Market and political impacts

Financial markets have been on high alert, with investors and analysts watching for signs that the long-running trade war might finally see a thaw, said the Reuters report published on Monday. 

The US trade chief highlighted that the swift progress during the Geneva meetings indicated that "perhaps the differences were not so large as maybe thought." 

This sentiment was echoed by the US Treasury, which pointed to the outcome as a positive step toward addressing what Secretary Greer described as the national emergency stemming from the escalating US trade deficit with China.

Broader trade negotiations

The Geneva discussions mark the first face-to-face meeting between top U.S. and Chinese economic officials since the onset of the Trump administration's aggressive tariff increases, which began with a 20% duty on Chinese goods in February and escalated to nearly $600 billion in two-way trade disruptions. 

White House officials have hinted that additional trade deals could be on the horizon with other countries, following a limited agreement with Britain that maintained a 10% duty on several UK products.

Official reactions

In separate briefings, US officials refrained from commenting on the specifics of any deal regarding tariff modifications, and similarly, Chinese negotiators provided no further details aside from their optimistic outlook. 

President Trump later provided his own positive reading on his social media platform, describing the talks as a "total reset" and noting that the negotiations were conducted in a "friendly, but constructive, manner".

As both sides prepare to release further details, the global market awaits confirmation on whether these discussions will translate into concrete measures to rebalance trade relations and ease the significant economic pressures affecting supply chains and domestic industries.