#TradeWarEases

As of May 12, 2025, there are signs that the U.S.-China trade war, which escalated significantly earlier this year, may be easing. High-level talks between U.S. and Chinese officials in Geneva, starting May 10, 2025, have shown progress toward de-escalation. U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer met with China’s Vice-Premier He Lifeng, marking the first face-to-face discussions since tariffs on Chinese goods reached 145% and Chinese counter-tariffs hit 125%. Both sides described the talks as constructive, with the U.S. claiming a deal to reduce the trade deficit and China noting an "important consensus." Investors reacted positively, with U.S. stock futures rising, reflecting optimism about averting further economic disruption.The trade war, intensified by U.S. tariffs imposed in February and March 2025, followed by China’s retaliatory tariffs on U.S. goods like agriculture and energy, had disrupted global markets and supply chains. Reports indicate the U.S. is considering lowering tariffs to below 60%, with China potentially reciprocating and easing restrictions on rare earth exports. While a comprehensive deal remains elusive, these negotiations suggest a mutual interest in reducing tensions, as both economies face significant losses—China’s exports to the U.S. are projected to drop by 77% this year, and the U.S. risks recession and higher consumer prices.