From May 10 to 11 local time, China and the United States held high-level economic and trade talks in Geneva, Switzerland. The talks led to a series of important consensuses and achieved substantive progress. On May 12, the two sides issued a joint statement on the Geneva Economic and Trade Meeting.

There are three key takeaways from this meeting:

1) The atmosphere of the talks was candid, in-depth, and constructive, with substantial progress made and important consensus reached. This progress can be attributed to two key factors. First, China firmly stood its ground to protect its own interests, prompting both sides to quickly raise tariffs to alarming levels. Second, the U.S. misjudged the situation and overestimated its own leverage, and as tariffs climbed, it became increasingly eager to find a way out.

2) Both China and the U.S. agreed to establish an economic and trade consultation mechanism to maintain communication on each side’s concerns in the economic and trade fields. The heads of the economic and trade teams from both sides are expected to jointly lead this mechanism. The teams will have regular and ad hoc communications to address issues in U.S.-China economic and trade relations, with future communication times and locations to be further agreed upon by both sides.

3) China and the U.S. will finalize the relevant details as soon as possible, and any potential agreement will be firmly aligned with China’s own development interests.

Three quotes from Chinese Vice Premier He Lifeng’s address at the press conference on the China-U.S. trade talks deserve particular attention:

“The atmosphere of the talks was candid, in-depth, and constructive. Substantive progress was made and important consensuses were reached.”

In plain terms:
• Candid means that everything that needed to be discussed was put on the table.
• In-depth means that the issues were explored thoroughly.
• Constructive indicates that both sides felt the dialogue was productive.

Gao Lingyun, a longtime researcher on global economics and politics, noted that in the context of current China-U.S. trade relations, the use of the terms “candid,” “in-depth,” and “constructive” carries specific significance:
• Candid indicates that both sides brought up their core concerns. For instance, amid this round of trade tensions, each party openly expressed why it believes it has suffered losses and directly stated its stance on so-called “reciprocal” tariffs.
• In-depth suggests that both sides backed their discussions with quantitative data on certain issues, enabling the conversation to go beyond surface-level or purely principle-based analysis.
• Constructive demonstrates that the talks yielded tangible outcomes, and that both parties were relatively satisfied with these results.

Luo Zhenxing, Director of the Economic Division at the Institute of American Studies, Chinese Academy of Social Sciences, pointed out that the substantial progress achieved in such a short period of time can be attributed to two main factors:

First, in this round of China-U.S. trade friction, the U.S. side imposed excessively high tariffs on Chinese goods, prompting China to respond resolutely in defense of its own interests. As a result, both sides quickly raised tariffs to prohibitive levels, leading to immediate and visible impacts on both economies.

On the morning of May 9, an official from a major U.S. West Coast port noted that in the past 12 hours, no cargo ships had departed from China bound for key West Coast ports in the United States. Such an effective standstill is extremely rare in today’s era of globalization.

The second factor is that, following the previous round of China-U.S. trade tensions, both sides have gained more experience and now have a clearer understanding of each other’s core concerns.

Against this backdrop, the high-level economic and trade talks between China and the United States in Switzerland achieved substantive progress. This outcome not only serves the interests of both countries but also aligns with the expectations of the international community.

“The two sides agreed to establish a communication mechanism on economic and trade issues to maintain dialogue on respective concerns.”

The mechanism will be jointly led by the principal officials in charge of economic and trade affairs from both China and the United States. Economic and trade teams from both countries will hold regular and ad hoc communications on matters related to China-U.S. trade relations. The specific timing and location of future exchanges will be determined through mutual consultation.

There remains a great deal of work ahead for the two sides’ economic and trade teams.

Regarding the trade frictions themselves, Professor Gong Jiong from the University of International Business and Economics (UIBE) pointed out that the main objective of this round of dialogue is to first restore China-U.S. trade flows. On the basis of this restoration, both sides can then explore and discuss a broader range of issues.

At the same time, expanding the list of cooperative areas and enlarging the scope of mutual benefit—essentially growing the “cooperation pie”— is also one of the key tasks of the newly established consultation mechanism. It aims to promote new progress in China-U.S. economic and trade relations.

China and the United States have significant potential for cooperation in areas such as manufacturing and emerging technologies. Of course, the extent to which this potential can be realized depends largely on how the U.S. views such cooperation.

Scott Bessent, the current U.S. Treasury Secretary, comes from a Wall Street background and retains a strong financial mindset. Since taking office, he has maintained close ties with capital markets. Following the rollout of the latest U.S. tariff measures, Bessent has reportedly dined with hedge fund managers and kept in touch with key players on Wall Street through private calls. As Treasury Secretary, the views of market participants carry considerable weight in shaping and informing his policymaking and execution.

Currently, for many, especially those on Wall Street, how China and the U.S. resolve their tariff issues will serve as a barometer for the future trajectory of global trade.

Several leading consulting firms have recently pointed out that during the U.S.-China trade war, the global supply chain’s focus is shifting. This process of reshaping comes with significant uncertainty and potential costs.

Recently, there has been a long-term versus short-term narrative struggle within the international community:

Which tariffs represent short-term pressures, and which could persist in the long term?

As a result, economic entities such as the European Union are assessing the global trade shifts triggered by U.S. tariffs and considering the issue of global trade rebalancing.

It’s important to note that the current international division of labor and state of industrial and supply chains largely align with the interests of U.S. capital markets. If the U.S. continues to impose so-called “reciprocal” tariffs, the shift from mere observation to decisive adjustments by more and more companies will inevitably harm the interests of these parties.

Such pressures will be directly felt by Bessent.

Therefore, at this point, Bessent appears to be relatively rational. During this round of talks, the Chinese delegation also gave positive evaluations to the U.S. representatives.

“On May 12, the two sides finalized the details and released a joint statement regarding the talks. “

The joint statement addresses several specific measures, which are of particular concern to the public. Any achievements reached are certainly in line with China’s own development interests.

Before the delegation’s departure, China had already made it clear that it would not sacrifice its principled stance or international fairness and justice in order to reach any agreement.

During the talks, both sides adhered to a rational, objective, and pragmatic spirit, working toward common ground and actively seeking the largest possible consensus. This laid the groundwork for the joint statement.

Naturally, the substantive progress achieved is closely related to China’s actions. After the U.S. imposed the so-called “reciprocal” tariffs, China was the first country to retaliate against these tariffs.

There is a saying in China: Only through struggle can peace and unity be achieved. This communication outcome, in fact, aligns perfectly with this idea.

Editor: LQQ