By John Revill and Emma Farge
GENEVA (Reuters) -Chinese Vice Premier He Lifeng held talks with U.S. Treasury Secretary Scott Bessent on Saturday in a tentative first step towards defusing a trade war that is disrupting the global economy.
Bessent and He were meeting in Geneva after weeks of growing tensions in which duties on goods imports between the world’s two largest economies have soared far beyond 100%. The talks were still under way late on Saturday afternoon and were widely expected to continue on Sunday.
The trade dispute, combined with U.S. President Donald Trump’s decision last month to impose duties on dozens of other countries, has disrupted supply chains, unsettled financial markets and stoked fears of a sharp global downturn.
The location of the talks in the Swiss diplomatic hub was not made public. However, witnesses saw both delegations returning to the residence of Switzerland’s ambassador to the U.N. in the leafy suburb of Cologny after a lunch break where they remained for several hours.
They had met for around two hours in the morning at the gated villa which has its own private park overlooking Lake Geneva. Earlier, U.S. officials including Bessent and U.S. Trade Representative Jamieson Greer smiled as they left their hotel on the way to the talks, wearing red ties and American flags on their lapels. Bessent declined to speak to reporters.
At the same time, Mercedes vans with tinted windows were seen leaving a hotel where the Chinese delegation was staying on the lakeside as runners preparing for a weekend marathon warmed up in the sunshine.
Washington is seeking to reduce its trade deficit with Beijing and convince China to renounce what the United States says is a mercantilist economic model and contribute more to global consumption, a shift that would require politically sensitive domestic reforms.
Beijing has pushed back against what it sees as external interference. It wants Washington to lower tariffs, clarify what it wants China to buy more of, and treat it as an equal on the world stage.
“China’s determination to protect its national development interests is as solid as a rock, and its stance and goals in defending international fairness and justice, as well as maintaining the global economic and trade order, remain unwavering,” Chinese state news agency Xinhua said in a commentary on Saturday.
LOW EXPECTATIONS
With distrust running high, both sides have been keen not to appear weak, and economic analysts have low expectations of a breakthrough.
U.S. President Donald Trump said on Friday that an 80% tariff on Chinese goods “seems right”, suggesting for the first time a specific alternative to the 145% levies he has imposed on Chinese imports.
He has suggested the discussions were initiated by China. Beijing said the U.S. requested the discussions and that China’s policy of opposing U.S. tariffs had not changed.
China could be looking for the same 90-day waiver on tariffs that Washington has given other countries as negotiations take place, while any kind of tariff reduction and follow-up talks would be seen as positive by investors.
Swiss Economy Minister Guy Parmelin met both parties in Geneva on Friday and said the fact that the talks were taking place was already a success.
“If a road map can emerge and they decide to continue discussions, that will lower the tensions,” he told reporters on Friday, saying talks could continue into Sunday or even Monday.
Switzerland helped to broker the meeting during recent visits by Swiss politicians to China and the United States.
China’s He is also provisionally scheduled to meet the director-general of the World Trade Organization, Ngozi Okonjo-Iweala, during his stay, a spokesperson for the Geneva-based watchdog said.
She has welcomed the talks “as a positive and constructive step towards de-escalation”, calling for sustained dialogue between the two top economies.
Since taking office in January, Trump has increased tariffs on Chinese imports to 145%, citing unfair trade practices and accusing Beijing of failing to curb the export of chemicals used to produce fentanyl, a lethal synthetic opioid.
China retaliated with 125% retaliatory tariffs, and said it would not bow to “imperialists” and bullies.
(Reporting by Emma Farge and John Revill; Additional reporting by Denis Balibouse and Sophie Yu in Beijing; Editing by Kevin Liffey and Mark Potter)
