GENEVA – Trade talks between the United States and China began Saturday in Geneva, the first in-person meeting since President Donald Trump raised tariffs on Chinese imports to as much as 145% in April.
The Swiss city’s neutral setting brought together U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer with Chinese Vice Premier He Lifeng. Both sides are hoping to cool tensions after months of a trade war that’s shaken global markets and hit China’s economy hard. China now faces factory shutdowns, more people out of work, and signs of slower growth.
Trump’s Tariffs Hit Trade Hard
President Trump’s “Liberation Day” tariffs, set on April 2, have changed the way the U.S. and China trade. The 145% U.S. duties on Chinese goods, matched by China’s 125% tariffs on American products, have almost stopped trade between the two countries.
Shipping company Flexport says ships from China to the U.S. dropped by 60% in April. JPMorgan expects Chinese imports to the U.S. could fall by 80% by mid-2025. At the Port of Los Angeles, executive director Gene Seroka reported that 20% of incoming ships scheduled for May have been cancelled, showing a sharp decline in activity.
Trump has said he’s open to lowering tariffs and suggested an 80% rate might be “about right,” but he left the decision to Bessent. While this could ease the current 145% level, analysts point out that even 80% is still a major barrier.
Wu Xinbo from Fudan University’s Centre for American Studies said the U.S. is looking to lessen the economic impact, which turned out worse than expected. Meanwhile, China wants talks based on “equality and mutual benefit.” Foreign Ministry spokesperson Lin Jian said, “Pressure or threats won’t work with China.”
China’s Economy Feels the Pressure
China’s export-led economy, already struggling from a weak property market, is taking another blow from the ongoing trade fight. The National Bureau of Statistics reported 5.4% annual growth in the first quarter, driven by a rush of exports before the tariffs hit.
But many economists question these numbers, given weaker recent data. The official Purchasing Managers’ Index (PMI) dropped to 49.0 in April, the lowest since December 2023, pointing to shrinking factory output. New export orders have also hit lows not seen since 2012, other than during the pandemic.
Top groups like the International Monetary Fund, Goldman Sachs, and UBS have all cut their 2025 growth forecasts for China. None expect the country to meet the government’s 5% target. Zichun Huang of Capital Economics predicts just 3.5% growth this year, blaming soft demand from other countries and not enough help from the government.
In response, China’s central bank announced new support on Wednesday, cutting the reverse repo rate to 1.4% and adding about $138 billion in new money to the system. Still, analysts like Julian Evans-Pritchard say this won’t be enough without more government spending.
Job Losses and Factory Shutdowns
The trade war is hitting China’s manufacturing areas hard. Nomura, a major investment bank, estimates the tariffs could cost up to 16 million jobs, especially in export zones like the south. While the official urban unemployment rate is 5.2%, unofficial figures suggest it could top 10% in some industrial areas.
Many factories have closed, and companies are struggling to replace lost U.S. orders since poorer countries can’t buy at the same scale. One Chinese official told Reuters that losing the U.S. market threatens the very survival of many firms.
There has been some unrest among workers, though reports of mass protests seem overstated. The government has promised to create 12 million new urban jobs in 2025 and is giving tariff exemptions on certain U.S. products, including microchips and pharmaceuticals, to help keep supply chains running. Still, weak prices, slow wage growth, and the property slump are making people and businesses less confident.
Global Impact and Careful Optimism
The Geneva discussions, held at Villa Saladin with views of Lake Geneva, are seen as an important step to steady U.S.-China trade. Swiss President Karin Keller-Sutter expressed hope that talks in Switzerland might help the world economy recover. But most experts don’t expect a quick deal. Alfredo Montufar-Helu from the Conference Board’s China Centre said the talks are more about building the groundwork for future deals than about reaching an agreement now.
Both countries are feeling the pressure at home. In the U.S., companies warn of rising prices and shortages as tariff-hit goods run out, and economists say shoppers will feel these changes by June. China doesn’t want to be seen as giving in, with state media stressing the country’s ability to stand up to outside pressure.
