China Steps Up for Trade Talks—But the US Showdown Is Far from Over

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By Laura Bicker | 5–7 min read

Geneva/Beijing, May 12, 2025 — After years of intense standoff and rising tariffs, China has finally come to the negotiating table with the United States—but the trade war is far from resolved.

For much of this economic conflict, China held its ground against the Trump administration’s aggressive tariff policies, projecting defiance with viral memes and sharp official rhetoric. Beijing insisted it would not yield to pressure, even as backdoor negotiations were underway.

As trade officials from both nations met in Geneva over the weekend, state-controlled Chinese media maintained a tone of mockery, posting a cartoon of the US Treasury Secretary pushing an empty shopping cart. And yet, the meetings marked a shift.

After two days of what were described as “robust” discussions, both sides signaled a cautious willingness to move forward—though major issues remain unresolved.

A Fragile Consensus

US Treasury Secretary Scott Bessent told reporters, “The consensus is clear—neither side wants a decoupling. These high tariffs were effectively functioning like an embargo. But we want trade, not walls.”

Under the new agreement, the US will reduce tariffs on Chinese goods from 60% to 30%, while China will lower its tariffs on American imports to 10%. It’s a move economists didn’t fully anticipate.

“I expected only partial relief—maybe down to 50%,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management. “This is a more optimistic result than we thought.”

Markets responded positively, and former President Trump praised the developments on Truth Social as a “total reset negotiated in a constructive and friendly way.”

Why Beijing Blinked

Beijing's softer tone signals internal pressure. While China remains the top trade partner for over 100 countries, its economy is grappling with a real estate crisis, sluggish consumer spending, and rising youth unemployment.

Factory slowdowns and job cuts have added to the urgency. Recent data revealed a 0.1% drop in China’s consumer price index for the third consecutive month—evidence that confidence among shoppers and businesses is waning.

Even Apple, a major US company, was caught in the crossfire. Its dependence on Chinese production lines made it particularly vulnerable to the escalating tariffs.

On Monday, China’s Commerce Ministry described the outcome of the Geneva talks as a step toward resolving differences and deepening cooperation—a diplomatic pivot compared to its previous hardline stance.

Temporary Relief, Lingering Tensions

Despite talk of a “reset,” the agreement offers only temporary relief. Tariff suspensions are valid for just 90 days—time meant for more negotiations, now being framed as a new "economic and trade consultation mechanism."

And while Beijing has toned down its rhetoric, it hasn’t backed down entirely. The Commerce Ministry urged the US to “thoroughly correct the wrong practice of unilateral tariff increases.”

State media echoed that caution. Xinhua warned that China’s “goodwill and patience have limits,” especially if the US continues to “repress and blackmail” without compromise.

What’s Next?

China wants to be seen as calm, rational, and globally responsible. But at home and abroad, its leaders must appear strong. Experts see this as a temporary truce, not a resolution.

“This is a win for dialogue and rationality,” said Zhang Yun of Nanjing University. “But the hard part is just beginning.”

The core issues—China’s trade surplus, industrial subsidies, and geopolitical flashpoints like Taiwan—remain unresolved. For now, the battleground has shifted from tariffs to diplomacy, but the struggle for a more balanced trade relationship continues.

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