Top U.S. and Chinese officials have opened critical trade talks in Geneva, aiming to de-escalate a growing tariff conflict that threatens to severely impact global markets and bilateral trade. U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer met with Chinese Vice Premier He Lifeng on Saturday at the historic Villa Saladin, overlooking Lake Geneva.

The negotiations come as both countries grapple with the consequences of steep tariffs. President Donald Trump recently raised tariffs on Chinese goods to a total of 145%, prompting China to retaliate with a 125% levy on American imports. These aggressive measures have strained trade relations between the world’s two largest economies and disrupted over $660 billion in annual commerce.

Despite low expectations for a breakthrough, analysts suggest even minor progress could send a positive signal to global markets. “The best scenario is for both sides to agree to simultaneous de-escalation,” said Sun Yun, director of the China program at the Stimson Center.

The talks mark the first direct meeting between Bessent and He, and follow Trump’s continued use of tariffs as a preferred economic strategy—most notably targeting China for issues ranging from trade practices to the flow of illicit drugs like fentanyl into the U.S.

While a comprehensive resolution remains elusive, the Geneva dialogue offers a rare opportunity to cool tensions and potentially set the stage for future cooperation.