The first meeting of the China-U.S. economic and trade consultation mechanism is scheduled to continue on Tuesday in London with a second day of talks.
The meeting of senior officials from the world’s two largest economies is widely seen as a crucial step in easing tensions between the two countries, sending a positive signal to the global economy.
The highly anticipated trade talks come just days after a phone call between Chinese President Xi Jinping and U.S. President Donald Trump. They aim to implement the consensus reached by both leaders and continue to promote dialogue and cooperation in the economic and commercial fields.
Chinese Vice Premier He Lifeng is leading the Chinese delegation in London, while U.S. Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer are leading the U.S. team.
Severe economic repercussions
The talks in London are a direct result of the Geneva talks in May, when both sides agreed to pause the escalation of tariffs and establish a consultation mechanism to continue negotiations.
The Geneva meeting featured the first face-to-face talks between senior officials from both countries since the U.S. imposed heavy tariffs on China in April, and China retaliated with robust measures.
Tariff increases have not only crippled the global supply chain, but they have also negatively affected the U.S. economy, driving up costs, reducing consumption, and increasing the risk of economic recession.
A Harris Poll poll conducted for Bloomberg News in late May revealed that many Americans are tightening their belts. A recent Bank of America survey showed that investments in U.S. assets have reached the lowest levels in nearly two decades. In addition, several sources, including the U.S. Bank, JP Morgan and the International Monetary Fund, estimate a 40% chance of recession in the United States.
Cooperation is the only way out
In the face of these troubling economic repercussions, Xi stressed that dialogue and cooperation are the only correct choice for the two countries. He hailed the Geneva negotiations as an important step towards dispute resolution and urged the two sides to make good use of the economic and trade consultation mechanism, seeking win-win outcomes in the spirit of equality and respect for mutual concerns.
The Chinese side is sincere about this and at the same time has its principles, Xi said.
The positive market reactions reflected Xi’s remarks and demonstrated growing optimism about easing trade tensions between China and the U.S. Following the leaders’ phone talks, demand for shipping soared, leading to an increase in freight rates, and U.S. stock indexes posted substantial gains, with the S&P 500, Nasdaq and Dow Jones posting significant increases.
Wu Zewei, special researcher at Sushang Bank, said the talks in London should boost prospects for bilateral cooperation.
He said that while the talks in London were not easy and required in-depth discussions, the Geneva talks had laid a solid foundation for cooperation and the recent phone call between the two heads of state had provided direction for future talks.
“Cooperation between China and the U.S. has significant potential. In the future, both countries can still achieve mutual benefits and win-win outcomes, promoting shared prosperity and creating a better life for their people,” Wu said.
