The US says a trade “deal” was reached with China following two days of talks in Geneva.

Treasury Secretary Scott Bessent called the discussions productive, while China’s Vice Premier He Lifeng described them as in-depth and candid.

A full joint statement is expected May 12, though no details have been released yet.

This was the first face-to-face meeting since the US imposed a 145% tariff on Chinese imports in January, prompting China to respond with a 125% levy.

The agreement reportedly aims to address the US’s US$1.2 trillion trade deficit and includes an economic and trade consultation mechanism.

🔗 Source: BBC

🧠 Food for thought

1️⃣ US-China trade wars follow recurring historical patterns

The current trade tensions follow a pattern that has characterized US-China economic relations for decades.

When the first American ship “Empress of China” reached Canton in 1784, it established a trade relationship that has featured periods of cooperation followed by conflict and renegotiation1.

This latest round mirrors previous escalations, particularly the 2019 trade war that concluded with a “Phase One” agreement when both economies felt sufficient pain2.

Like today’s talks, the 2019 agreement addressed structural reforms in intellectual property and technology transfer while maintaining significant tariffs. The US kept 25% tariffs on $250 billion of Chinese imports2.

The pattern suggests that while deals can reduce immediate tensions, they rarely resolve the fundamental economic competition and strategic mistrust that has characterized the relationship.

2️⃣ Tariffs exact measurable economic costs across both economies

The brief but intense tariff war created substantial economic damage that likely motivated both sides to negotiate.

Economic research shows that Trump’s tariffs would reduce long-run US GDP by 0.8%, costing American households over $1,200 in 2025 through higher prices and reduced economic activity3.