Breaking the Ice in China-U.S. Tariff Negotiations: A Glimmer of Hope for Global Markets

After ten hours of closed-door discussions in Geneva, the Chinese and U.S. delegations shook hands in agreement. This trade game that has lasted for a decade finally sees a glimmer of hope for a breakthrough.

At the negotiation table, the Chinese side firmly maintained its bottom line: the cancellation of all new tariffs is non-negotiable, and political coercion is absolutely unacceptable. In response to U.S. pressure to link the fentanyl issue with tariffs, the Chinese side directly showcased its strategic resources in rare earths, forcing the White House to readjust its strategy.

Initially, the U.S. proposed a tiered tax reduction plan with tariffs at 145%, while the Chinese side used WTO rules as a shield, debunking the "reciprocal tariffs" myth with data: over the past five years, 37% of China's surplus with the U.S. was actually profits from U.S. companies operating in China. When the U.S. suddenly adjusted the tariff reduction from 80% to 34%, the Chinese side demonstrated strategic composure and only responded the following morning, ultimately leading to the establishment of a regular consultation mechanism co-hosted by Helipeng and Beisente.

This marathon negotiation was filled with strategic maneuvering: from fierce exchanges on the first day to mediation amidst the aroma of coffee on the second day, from Trump's strong statements on social media to the cautious wording of the joint statement on "substantial progress," every detail showcased the struggle of major powers. Although specific terms have not yet been made public, the U.S. Treasury Secretary's statement of "productive" discussions has already led the market to anticipate that tariffs may drop below 50%.