High-level U.S.-China economic and trade talks are held in Switzerland: He Lifeng and the U.S. Treasury Secretary discuss tariff issues
On May 9, 2025, Vice Premier of the State Council of China, He Lifeng, traveled to Switzerland to hold high-level economic and trade talks with U.S. Treasury Secretary Scott Bessent in Geneva. This marks the first major engagement since the onset of the U.S.-China trade war. The talks occur amid economic pressure and the risk of international isolation facing China, with both parties prepared to negotiate on tariff matters. The meeting underscores the sensitivity of diplomatic interactions between the U.S. and China, with both sides offering differing accounts of who initiated the talks, highlighting deep-rooted mistrust.
Key Updates
05/09 11:04
High-level U.S.-China economic and trade talks are held in Switzerland: He Lifeng and the U.S. Treasury Secretary discuss tariff issues
On May 9, 2025, Vice Premier of the State Council of China, He Lifeng, traveled to Switzerland to hold high-level economic and trade talks with U.S. Treasury Secretary Scott Bessent in Geneva. This marks the first major engagement since the onset of the U.S.-China trade war. The talks occur amid economic pressure and the risk of international isolation facing China, with both parties prepared to negotiate on tariff matters. The meeting underscores the sensitivity of diplomatic interactions between the U.S. and China, with both sides offering differing accounts of who initiated the talks, highlighting deep-rooted mistrust.
Background of the Escalating US-China Trade War
Since April 2025, US President Trump has imposed tariffs of up to 145% on Chinese imports, marking a further escalation in the US-China trade war. China has responded with retaliatory tariffs of up to 125%. This tariff war has impacted both economies, particularly the manufacturing hubs in southern China, leading to factory closures, strikes, and waves of unemployment. According to Reuters, export-oriented industries such as furniture, toys, and textiles are the first to be hit, with companies struggling to find alternatives to the US market.
Investment bank Nomura Securities predicts that if the trade war continues, China could lose up to 16 million jobs. Growing concerns about the economic outlook within China have prompted Beijing to send Vice Premier He Lifeng to hold talks with the US to alleviate the pressure.
He Lifeng Steps In: The Economic "Czar" Takes on a Heavy Responsibility
He Lifeng is a close confidant of Chinese President Xi Jinping and previously led the negotiations for the 2020 US-China "Phase One" trade agreement. His visit to Switzerland as the "Chinese lead for US-China economic and trade talks" underscores Beijing's emphasis on this meeting. According to a Chinese Foreign Ministry announcement, He Lifeng will visit Switzerland from May 9 to 12 to hold talks with the US delegation, and then proceed to France to chair the China-France high-level economic and financial dialogue.
Nevertheless, China's expectations for this meeting seem limited. A knowledgeable source revealed that Beijing has positioned this meeting as a "one-time conference," primarily to understand the US's stance and bottom line, rather than to reach an immediate agreement.
Switzerland's Diplomatic Role as a Neutral Venue
The meeting is set to take place in Geneva, Switzerland, highlighting Switzerland's neutral role in international diplomacy. The Swiss government facilitated the meeting by sending three ministers to visit both China and the US, demonstrating its active role in mediation. The Swiss Foreign Ministry stated that hosting the US-China trade talks is a testament to its long-standing neutral foreign policy.
Switzerland also hopes to use this opportunity to negotiate the removal of high tariffs on Swiss goods by the US, as the average tariff on Swiss exports to the US is currently 31%, higher than that of other European countries.
Positions and Focus of the Negotiations
The US delegation, led by Treasury Secretary Bessant and Trade Representative Jamieson Greer, is expected to discuss tariff reductions, specific product tariff arrangements, export controls, and the "de minimis" policy. According to Bloomberg, the US may consider lowering tariffs on China from 145% to below 60% as a starting point for negotiations.
China, however, emphasizes its confidence in handling trade disputes. Deputy Foreign Minister Hua Chunying recently stated in Yunnan that China does not wish to engage in a "war" with any country, but if faced with reality, China is "fearless." She criticized the US trade policy as "unsustainable" and noted that the American public has already felt the pain of the tariff war.
Diplomatic Instability and Challenges in Negotiation Arrangements
Although both sides agreed to hold talks, there are differing accounts of who initiated the contact. US officials claim that China initiated the meeting, while China states that the US first extended the invitation. This mutual blame reflects the ongoing trust deficit between the US and China.
Additionally, there were disagreements in arranging the negotiation representatives. Reports indicate that Chinese Commerce Minister Wang Wentao attempted to contact the US Commerce Secretary but was rejected due to a mismatch in rank. Ultimately, Beijing decided to send Vice Premier He Lifeng, meeting the US's desire to speak with high-level officials while avoiding involving Xi Jinping directly in potentially embarrassing negotiations.
International Pressure and China's Strategic Adjustments
In addition to pressure from the US, China also faces challenges from other trading partners. Countries such as Vietnam, India, and Japan have begun trade negotiations with Washington, and Beijing fears losing its voice at the international negotiating table if it does not act promptly. The Chinese Ministry of Commerce recently issued a statement warning other countries that "appeasement policies cannot bring peace, and compromise does not earn respect," indicating its firm stance on protecting its interests.
At the same time, China is actively reaching out to Southeast Asian and Arab countries, planning to send Premier Li Qiang to a multilateral summit in Malaysia at the end of May, emphasizing the message "we will purchase goods from you" in an attempt to expand alternative markets.
