Context:

Donald Trump announced a 'total reset' in US-China trade relations after the first day of talks in Switzerland, describing them as 'friendly, but constructive'. The ongoing trade war, marked by significant tariffs from both sides, has led to economic strain, including a contraction in the US economy and challenges for Chinese exporters. While Trump emphasized progress, the US has maintained that tariff reductions will not occur unilaterally, and China must make concessions. The talks, involving China's Vice-Premier He Lifeng and US Treasury Secretary Scott Bessent, aim to de-escalate tensions rather than form a comprehensive trade deal. Despite some optimism, the underlying trade conflict, exacerbated by previous tariff announcements on steel, aluminum, and automobiles, continues to impact international trade dynamics.

Dive Deeper:

• Donald Trump declared a 'total reset' in US-China trade relations, highlighting the constructive nature of talks in Switzerland aimed at improving bilateral trade ties.

• The trade war between the US and China has seen severe tariffs imposed by both countries, with the US enacting a 145% tariff on Chinese imports and China retaliating with 125% levies on US goods.

• Economic repercussions have been significant, with Chinese exporters struggling to sell products to the US and the US economy contracting at an annual rate of 0.3% in the first quarter.

• The US administration, represented by Treasury Secretary Scott Bessent, seeks de-escalation in trade tensions, emphasizing that any tariff reductions will require reciprocal concessions from China.

• The recent talks are not designed to result in a 'big trade deal' but are a step towards reducing tensions and opening up China to American businesses, as stated by Trump.

• China's decision to engage in talks was influenced by global expectations, its own national interests, and pressures from American businesses affected by the tariffs.

• The broader trade conflict includes Trump's imposition of universal baseline tariffs on imports, targeting countries like China and the EU as part of a strategy to counteract what he perceives as unfair trade practices.