The U.S. and China are poised to hold their first high-level trade negotiations since President Trump enacted a fresh wave of punitive tariffs, branding them as “liberation day” measures. These tariffs raised U.S. duties on Chinese goods to 145%, with China retaliating at 125%, creating an effective freeze in bilateral trade flows. The upcoming meeting in Geneva between Treasury Secretary Scott Bessent, U.S. Trade Representative Jamieson Greer, and China’s Vice Premier He Lifeng represents a pivotal moment in what has become an intensifying economic confrontation.

With China’s exports to the U.S. falling by over 20% in April and mounting inflationary pressure in the U.S., there is bipartisan political and business pressure on the Trump administration to ease the standoff. Behind the scenes, sources suggest Washington is considering slashing tariffs to as low as 50%, a proposal that has already buoyed global markets — though analysts expect a more moderate rollback of around 25% in the near term.

However, the outlook remains fragile. While the talks signal a shift from confrontation to negotiation, key structural issues—including IP enforcement, forced tech transfers, and state subsidies—remain unresolved. Markets are hopeful, but few expect a comprehensive deal in this round.

A breakthrough might reset investor sentiment and improve global growth prospects. Conversely, failure could cement a decoupling trend and intensify supply chain realignments.