This article was originally published by Tyler Durden at ZeroHedge.
President Donald Trump said late on Saturday that “great progress” was being made in ongoing U.S.-China talks over tariffs menacing the global economy, and even suggested a “total reset” was on the table as tariff negotiations are set to continue Sunday in Switzerland.
No major breakthrough was announced in discussions that lasted over 10 hours between U.S. officials, including Treasury Secretary Scott Bessent, U.S. Trade Representative Jamieson Greer, and a delegation led by Chinese Vice Premier He Lifeng. Still, Trump struck an upbeat tone.
“A very good meeting today with China, in Switzerland. Many things were discussed, and much was agreed to. A total reset negotiated in a friendly, but constructive, manner,” the president wrote on his Truth Social platform. “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!!!”
He gave no further details, and officials at the White House also offered little information during and after the opening day of discussions.
Trump’s post followed reports that talks would continue Sunday, after extending late into the day on Saturday. Talks have been shrouded in secrecy, and neither side made comments to reporters as they left.
Several convoys of black vehicles left the residence of the Swiss ambassador to the UN in Geneva, which hosted the talks aimed at de-escalating trade tensions between the world’s two biggest economies. Diplomats from both sides also confirmed that the talks took place.
The opening day of negotiations were held in the sumptuous 18th-century “Villa Saladin” overlooking Lake Geneva. The former estate was bequeathed to the Swiss state in 1973, according to the Geneva government.
Trump’s assessment aside, while prospects for a major breakthrough appeared dim when the talks opened there is hope that the two countries will scale back the tariffs they have slapped on each other’s goods, a move that would relieve world financial markets and companies on both sides of the Pacific Ocean that depend on US-China trade.
Trump last month raised U.S. tariffs on China to a combined 145%, and China retaliated by hitting American imports with a 125% levy. Tariffs that high essentially amount to the countries’ boycotting each other’s products, disrupting trade that last year topped $660 billion.
And even before talks got underway, Trump suggested Friday that the U.S. could lower its tariffs on China, saying in a Truth Social post that “ 80% Tariff seems right! Up to Scott″ Bessent.
Sun Yun, director of the China program at the Stimson Center, noted it will be the first time He and Bessent have talked. She doubts the Geneva meeting will produce any substantive results: “the best scenario is for the two sides to agree to de-escalate on the … tariffs at the same time,” she said, adding even a small reduction would send a positive signal. “It cannot just be words.”
Goldman Sachs expects both sides to cut tariffs by more than half when negotiations are over.
Since returning to the White House in January, Trump has aggressively used tariffs as his favorite economic weapon. He has imposed a 10% tax on imports from almost every country in the world.
But the fight with China has been the most intense. His tariffs on China include a 20% charge meant to pressure Beijing into doing more to stop the flow of the synthetic opioid fentanyl into the United States.
The remaining 125% involve a dispute that dates back to Trump’s first term and comes atop tariffs he levied on China back then, which means the total tariffs on some Chinese goods can exceed 145%.
Total US tariffs on Asian countries in context are shown below.
During Trump’s first term, the U.S. alleged that China uses unfair tactics to give itself an edge in advanced technologies such as quantum computing and driverless cars. These include forcing U.S. and other foreign companies to hand over trade secrets in exchange for access to the Chinese market; using government money to subsidize domestic tech firms; and outright theft of sensitive technologies.
Those issues were never fully resolved. After nearly two years of negotiation, the United States and China reached a so-called Phase One agreement in January 2020. The US agreed then not to go ahead with even higher tariffs on China, and Beijing agreed to buy more American products. The tough issues – such as China’s subsidies – were left for future negotiations.
But China didn’t come through with the promised purchases, partly because COVID-19 disrupted global commerce just after the Phase One truce was announced. As a result, America’s trade deficit with China came to a staggering $263 billion last year.
The fight over China’s tech policy now resumes.
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