US, China Seal Trade Pact to Slash Deficit Amid Warming Ties

After marathon talks in Geneva, both nations reach agreement aimed at cutting America’s $1.2 trillion trade deficit, with official details to follow on Monday.

May 12, 2025: Geneva: The United States and China have reached a breakthrough agreement to reduce trade imbalances following two days of high-stakes negotiations in Geneva. US Treasury Secretary Scott Bessent described the outcome as “substantial progress” and said further details would be announced on Monday.

The long-anticipated deal comes after months of economic tension and retaliatory tariffs, with both sides seeking to reset strained ties. US Trade Representative Jamieson Greer, who co-led the American delegation with Bessent, confirmed a deal had been struck to reduce the $1.2 trillion US global goods trade deficit, a key objective for the Biden administration.

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“It’s important to understand how quickly we were able to come to agreement,” Greer said. “The Chinese were tough negotiators but committed.”

The Chinese delegation was led by Vice Premier He Lifeng, accompanied by two vice ministers. This marked the first in-person meeting since both countries imposed steep tariffs—over 100%—on each other’s exports earlier this year.

While Bessent avoided specifics on tariff rollbacks, insiders suggest that de-escalation measures and market access for US firms in China form the core of the agreement. Earlier on Sunday, White House economic adviser Kevin Hassett told Fox News that China appeared “very eager” to rebalance trade and repair ties with the US.

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President Donald Trump, who has been closely monitoring developments, posted on Truth Social, “A total reset… GREAT PROGRESS MADE!!!”

Neutral Ground, Global Stakes

The negotiations were held at a gated villa in Cologny, the residence of Switzerland’s UN ambassador. The neutral setting was chosen through diplomatic overtures from Swiss leaders. The sunny lakeside setting belied the weight of the talks—meant to cool down a trade war that has rattled markets and upended global supply chains.

The US is pushing Beijing to shift away from its mercantilist economic model and boost domestic consumption, a move that may require politically sensitive reforms within China.

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Looking ahead, Hassett hinted that more bilateral trade agreements could follow soon, with over two dozen deals reportedly in the pipeline, including frameworks resembling the recently concluded pact with the United Kingdom.

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US-China trade deal, Scott Bessent, Donald Trump, trade war, US trade deficit, Jamieson Greer, He Lifeng, Geneva trade talks, tariffs, global economy, Swiss diplomacy, China economy, Trump Truth Social