Trump Signals Potential Tariff Reduction as U.S. and China Prepare for High-Stakes Trade Talks in Geneva

credit: White House Donald Trump

Geneva, Switzerland May 2025 In a surprising move that could reshape global trade dynamics, former U.S. President Donald Trump signaled on Friday that he may lower tariffs on Chinese imports ahead of crucial U.S.-China trade negotiations scheduled to take place in Geneva this weekend.

Posting on his Truth Social platform, Trump wrote, “80% tariff on China seems right!” a message that caught the attention of global markets and political analysts alike. The statement hints at a potential recalibration of U.S. trade policy toward China, reducing tariffs from the current average of 145%, with some goods facing combined duties as high as 245%.

Trump did not elaborate on whether the proposed 80% rate would be a final or transitional measure, but the remark suggests that the former president is open to compromise as tensions between the two largest economies remain high.

U.S.-China Trade War and Its Global Impact

The ongoing trade war between the United States and China has been one of the defining geopolitical and economic issues of the past decade. What began as a strategic disagreement over intellectual property, market access, and trade deficits has evolved into a full-scale economic standoff, impacting industries from technology to agriculture and reshaping global supply chains.

Since the imposition of steep tariffs by the Trump administration, China has responded with retaliatory duties reaching 125% on American goods. These countermeasures, combined with Washington's policies, have created what some analysts are calling a quasi-embargo on bilateral trade. Shipping data shows a dramatic decline in the movement of goods between the two nations, with ripple effects felt across Europe, Asia, and developing economies reliant on global trade flows.

Geneva Talks: A Critical Diplomatic Moment

This weekend, U.S. Treasury Secretary Scott Bessent will meet with Chinese Vice Premier He Lifeng in Geneva. The high-stakes meeting comes at a time when businesses, consumers, and investors are all watching closely for signs of easing tensions.

Trump, in his social media post, appeared to place the responsibility for tariff decisions squarely on Bessent’s shoulders, writing that any tariff adjustment was “up to Scott B.” This shows a level of deference that is unusual for Trump, who typically prefers to drive policy decisions himself.

U.S. Trade Representative Jamieson Greer will also be attending the talks, indicating that the United States is taking a multi-agency approach to what could be a major shift in trade relations.

According to Bessent, the focus of the Geneva meeting will be on “de-escalation” rather than hammering out a comprehensive trade agreement. Both sides are expected to discuss strategies to roll back tariffs gradually and re-establish more predictable trade flows.

Economic Experts Weigh In: Hopeful, But Cautious

The announcement of the Geneva talks has drawn mixed reactions from economic experts and former government officials.

“We have trade-prohibitive tariffs in both directions,” said Bill Reinsch, a senior advisor at the Center for Strategic and International Studies (CSIS). “Relations are deteriorating, but the meeting is a good sign. It shows that both sides are still willing to engage diplomatically.”

Reinsch, a former member of the U.S.-China Economic and Security Review Commission, emphasized that even informal discussions are valuable at this stage.

Xu Bin, a professor of economics and finance at the China Europe International Business School, told AFP that maintaining dialogue is critical to preventing further economic fallout.

“China is the only country with tit-for-tat tariffs against the U.S.,” Xu said. “These meetings are essential not just for trade but for broader geopolitical stability.”

WTO, Global Markets React to Talks

The World Trade Organization (WTO) has also expressed strong support for the Geneva talks. In a statement, WTO Director-General Ngozi Okonjo-Iweala praised the meeting as a “positive and constructive step toward de-escalation.”

“Sustained dialogue between the world’s two largest economies is critical to easing trade tensions, preventing fragmentation along geopolitical lines, and safeguarding global growth,” the statement read.

 Stock markets around the world responded positively to Trump’s comments and news of the Geneva negotiations. U.S. stocks opened higher, buoyed by investor optimism, although gains were tempered later in the day. European indices remained largely in the green, while Asian markets showed mixed results, reflecting cautious hope among traders.

Recent UK Trade Agreement Signals Policy Shift

The Geneva talks come just days after Trump announced a new trade agreement with the United Kingdom, marking the first deal since his administration enacted sweeping global tariffs last month.

Although not legally binding, the five-page agreement provides sector-specific relief on British exports to the U.S., including automobiles, steel, and aluminum. In return, the UK has agreed to open its markets to American beef and other agricultural products, a move likely to benefit U.S. farmers.

Still, a 10% baseline tariff on most British goods remains in place, and U.S. Commerce Secretary Howard Lutnick warned that other nations with trade surpluses should expect even higher tariffs.

“The 10 percent baseline is for countries with balanced trade. If you run a surplus, the tariffs will be steeper,” Lutnick said in an interview with CNBC.

 The British agreement may serve as a blueprint for upcoming negotiations with other trade partners, including the European Union and China.

Divergent Negotiation Styles Could Be a Barrier
Despite the optimistic tone surrounding the Geneva talks, experts caution that fundamental differences in negotiating strategies could complicate progress.

“Trump’s approach is generally top-down,” explained CSIS’s Reinsch. “He wants to meet with Xi Jinping and make a big deal, then have staff sort out the details.”

“The Chinese are the reverse,” he added. “They prefer to settle all issues at lower levels before any leader-to-leader engagement.”

 This structural divergence could pose a significant barrier to reaching a swift agreement. However, both sides appear willing to find common ground, at least in terms of opening a channel for continued discussion.

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The Future of Global Trade
At its core, the U.S.-China trade conflict is about more than just tariffs. It’s a battle over the rules that will govern global trade in the 21st century - including issues like digital commerce, intellectual property, climate-linked trade rules, and state subsidies.
A meaningful thaw in relations could restore investor confidence, lower prices for consumers, and allow businesses to resume long-term planning. On the other hand, failure to make progress could deepen global economic fragmentation and spark a renewed cycle of protectionism.

While it’s too early to predict the outcome of the Geneva talks, Trump’s comments and the recent UK trade agreement suggest a possible softening in tone from Washington. If negotiators can begin the process of rolling back excessive tariffs, it would be a win not just for the U.S. and China, but for the entire global economy.
For now, all eyes are on Geneva, where the future of global trade may begin to take a new shape.

By Primelineinfo

Tags: U.S.-China Trade, Global Economy, International Relations, Donald Trump, Geneva Talks