High-level trade talks between the US and China have commenced in Geneva, Switzerland, in a bid to de-escalate the escalating trade war. Chinese Vice Premier He Lifeng and US Treasury Secretary Scott Bessent are leading the negotiations, marking the first direct contact between the two sides since US President Donald Trump hiked tariffs on China to 145% last month.

The talks come amid growing tensions, with both countries imposing massive tariffs on each other’s imports. The US has placed a minimum 145% tariff on most Chinese imports, while China has responded with a 125% tariff on most US imports. This has resulted in a sharp decline in trade between the two nations, with imports into the US expected to fall at least 20% year over year in the second half of 2025.

Bessent has urged the public not to expect a major trade deal out of the meetings but acknowledged it’s an important step in negotiations. “De-escalation is the focus,” Bessent said earlier. Trump floated the possibility of slashing tariffs on Chinese goods to 80% while demanding China “open up its market to USA.” “80% Tariff on China seems right! Up to Scott B,” Trump said in a Truth Social post.

The trade war has already affected both economies, with the US experiencing its first quarterly contraction since early 2022. Chinese exports to the US fell sharply in April, declining 21% year-over-year to $33 billion. The impact of sky-high tariffs is also being felt keenly in China, whose manufacturing sector contracted at its fastest pace in 16 months in April.

The US-China trade war has significant implications for the global economy, with the World Trade Organization warning that a prolonged economic divide between rival blocs could reduce global GDP by nearly 7% over the long term. The Geneva meetings are seen as a critical step towards stabilizing the strained economic relationship between the two nations.