US, China deal a ‘total reset’
The US has reported “substantial progress” in talks with China’s top economic officials to de-escalate a damaging trade war.
United States Treasury Secretary Scott Bessent offered no details of an agreement reached as two days of negotiations with China wrapped up in Geneva.
Bessent told reporters that details would be announced on Monday and that US President Donald Trump was fully aware of the results of the “productive talks”.
US Trade Representative Jamieson Greer, who participated in the talks with Bessent, Chinese Vice Premier He Lifeng and two Chinese vice ministers, described the conclusion as “a deal we struck with our Chinese partners” that will help reduce the $US1.2 ($1.9) trillion US global goods trade deficit.
“And this was… a very constructive two days. It’s important to understand how quickly we were able to come to agreement, which reflects that perhaps the differences were not so large as maybe thought,” Greer said, adding that the Chinese officials were “tough negotiators”.
China Daily reported Monday that Chinese vice premier He Lifeng has described the talks as candid, in-depth and constructive.
The meeting was the first face-to-face interaction between Bessent, Greer and He since the world’s two largest economies imposed tariffs well above 100 per cent on each other’s goods.
Although Bessent has said the bilateral tariffs were too high and needed to come down in a de-escalation move, he did not offer any details of reductions agreed and took no questions from reporters.
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Earlier, White House economic adviser Kevin Hassett said the Chinese were “very, very eager” to engage in discussions and rebalance trade relations with the United States.
Hassett also told Fox News that more foreign trade deals could be coming with other countries as soon as this week.
BREAKING: U.S. Announces China Trade Deal in Geneva pic.twitter.com/JjgvYAvAGe
— The White House (@WhiteHouse) May 11, 2025
Overnight, Trump gave a positive reading of the talks, saying the two sides had negotiated “a total reset… in a friendly, but constructive, manner”.
“A very good meeting today with China, in Switzerland. Many things discussed, much agreed to,” Trump posted on his Truth Social platform.
“We want to see, for the good of both China and the US, an opening up of China to American business. GREAT PROGRESS MADE!!!,” Trump added.
The negotiating teams met at the gated villa of Switzerland’s UN ambassador, overlooking Lake Geneva in the leafy suburb of Cologny.
Black Mercedes vans with sirens shuttled to and from the venue, which was bathed in bright sunshine.
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Neutral Switzerland was chosen as the venue following approaches by Swiss politicians on recent visits to China and the United States.
Washington is seeking to reduce its $US295 billion ($460 billion) goods trade deficit with Beijing.
Investors welcome progress
Investors welcomed the conciliatory tone at the US-China trade talks.
“This is a step in the right direction, showing that both sides are interested in coming to a constructive conclusion and (developing) a better trade relationship,” said Eric Kuby, the chief investment officer at North Star Investment Management Corp. in Chicago.
“The details are quite sketchy, but I think the direction sounds to be more cooperative rather than combative, and I think that we have to view that as a positive.”
The meeting in Switzerland could mark one of the biggest developments since Trump launched sweeping tariffs on April 2, which threw the global trade landscape into chaos and set off extreme market volatility.
Recently, investors have expressed optimism that the worst-case trade scenarios would not come to pass and pointed to signs of de-escalation between the US and China as a reason behind a rebound in equities.
“Markets may be encouraged by some agreement on a deal, but it will remain contingent on further details being released,” said Gennadiy Goldberg, head of US rates strategy at TD Securities in New York.
“Recent price action suggests some optimism around a trade deal. If that turns out to be the case, pricing will have been justified. The risk is if the deal is less substantial than expected. Then the market might come away disappointed.”
Indeed, despite comments by Trump ahead of the talks suggesting a lower level of Chinese tariffs, and a trade deal announced on Thursday between the US and Britain, many market participants said they were not expecting major breakthroughs in the talks.
“We’re still doubtful that direct US-China negotiations will lead to a ‘grand compromise’,” said Thierry Wizman, global FX and rates strategist at Macquarie, in a note to clients.
Trade tensions between the two nations escalated last month, when the US boosted tariffs on all Chinese imports to a whopping 145 per cent, and China then raised levies on US imports to 125 per cent.
On Friday, comments by Trump that an 80 per cent tariff on Chinese goods “seems right,” making his first suggestion of a specific alternative to the 145 per cent levies, created some hope of progress toward resolving the dispute.
