The countries are finally talking but why now?

The trade conflict between the US and China may be easing as both nations initiate discussions in Switzerland.

Senior trade officials met on Saturday, marking the first high-level talks since US President Donald Trump imposed tariffs on China in January.

China quickly retaliated, resulting in a tense standoff where both nations imposed tariffs against each other. Current US tariffs on Chinese imports are at 145%, while some US goods face 125% tariffs in China.

For weeks, both sides have exchanged stern and sometimes heated rhetoric, attempting to portray the other as more desperate.

And yet, this weekend, they find themselves at the negotiation table.

So, why now?

Despite numerous retaliatory tariffs, signals from both governments indicate a desire to end the deadlock, though it’s unclear who would concede first.

“Neither party wants to show weakness,” said Stephen Olson, a senior fellow at Singapore’s ISEAS-Yusof Ishak Institute and former US trade negotiator.

“The discussions are happening now because both sides believe they can proceed without appearing to surrender to the other.”

However, China’s foreign ministry spokesperson Lin Jian stated that “the discussions are happening at the request of the US.”

Meanwhile, the commerce ministry suggested it was responding to “requests from US businesses and consumers.”

The Trump administration contends that it is Chinese officials who are eager to negotiate due to “their economy struggling.”

“They claimed we initiated? I think they should review their records,” Trump remarked at the White House on Wednesday.

As the talks approached, the president adopted a more diplomatic tone: “We can all play games. Who called first, who didn’t – it’s irrelevant,” he told reporters on Thursday. “What truly counts is what transpires in that room.”

The timing is crucial for Beijing since it coincides with Xi’s visit to Moscow. He was a guest at Friday’s Victory Day parade in Moscow, commemorating the 80th anniversary of the World War II victory over Nazi Germany.

Xi was seen alongside leaders from the Global South, reminding Trump’s administration that China has alternatives for trade and is positioning itself as a global leader.

This allows China to demonstrate its strength as it approaches the negotiation table.

Trump maintains that the tariffs will empower America, while Beijing insists it will “fight until the end” – yet these tariffs are impacting both economies.

According to government figures, factory activity in China has declined, with manufacturing in April hitting its lowest level since December 2023. Additionally, a Caixin survey indicated services activity has reached its lowest in seven months.

The BBC reported that Chinese exporters are struggling with piled-up inventory as they seek markets outside the US.

“I believe [China] recognizes that an agreement is preferable to no agreement,” asserts Bert Hofman, a professor at the East Asian Institute of the National University of Singapore.

“They’ve adopted a pragmatic viewpoint and stated, ‘Alright, we need to initiate these discussions.’

Following the major May Day holiday in China, officials in Beijing have determined that now is the ideal moment to engage in dialogue.

On the flip side, the uncertainty from tariffs has caused the US economy to contract for the first time in three years.

Industries reliant on Chinese products are particularly anxious. A toy company owner in Los Angeles mentioned to the BBC that they face “the total breakdown of the supply chain.”

Trump has also acknowledged that US consumers will bear the burden.

American children might “end up with two dolls instead of 30,” he noted at a cabinet meeting this month, “and perhaps the two dolls will cost a few dollars more than usual.”

Additionally, Trump’s approval ratings have declined amid inflation fears and potential recession, with over 60% of Americans feeling he is overly fixated on tariffs.

“Both countries are under pressure to deliver reassurance to increasingly anxious markets, businesses, and domestic audiences,” Olson states.

“A few days of meetings in Geneva will help achieve that goal.”

While the upcoming talks inspire optimism, a resolution may take time.

The discussions are primarily for “checking in,” according to Hofman, which may involve an “exchange of views,” followed by setting an “agenda for future discussions” if successful.

The negotiations are expected to unfold over several months, similar to during Trump’s initial term.

After nearly two years of reciprocal tariffs, the US and China reached a “phase one” agreement in early 2020 to suspend or lessen some tariffs. However, it did not tackle more complicated issues, like Chinese subsidies for specific sectors or timelines for lifting remaining tariffs.

In fact, many tariffs remained through Biden’s presidency, with Trump’s new tariffs adding to previous levies.

This time, what could emerge is a “phase one deal on steroids,” Olson suggested: going beyond the initial agreement to address urgent concerns—ranging from the illegal fentanyl trade that Washington wants China to combat more rigorously to Beijing’s ties with Moscow.

However, experts caution that many issues will take time to resolve.

“The fundamental conflicts undermining the US-China trade relationship won’t be sorted out swiftly,” Olson adds.

“Geneva will likely yield only bland statements about ‘honest discussions’ and the intention to continue the dialogue.”