The countries finally talk, but why now?

The US-China Trade warWith the world’s two largest economies that start with conversations in Switzerland.

Top Trade officers from both parties will meet on Saturday In the first meeting at a high level since US President Donald Trump China at rates in January.

Beijing immediately took revenge and a tense distance followed when the two countries got taxes on each other. New American rates for Chinese import are 145%, and some American exports to China are confronted with tasks of 125%.

There have been weeks of strict and sometimes fiery rhetoric where each party wanted to paint the other as the more desperate party.

And yet they will be opposed to the negotiating table this weekend.

So why now?

Despite several rounds of Tit-for-Tat rates, both parties have sent signals that they want to break the impasse. Except that it was not clear who would blink first.

“Neither of both parties wants to deteriorate,” says Stephen Olson, senior visiting fellow at the ISEASOF ISHAK Institute of Singapore and a former American trading negotiator.

“The conversations are now taking place because both countries have assessed that they can move forward without collapsing into the other side.”

Nevertheless, the spokesperson for the Chinese Ministry of Foreign Affairs Lin Jian emphasized on Wednesday that “the conversations are held at the request of the US”.

And the Ministry of Commerce framed it as a favor for Washington and said it “answered the” calling from American companies and consumers “.

However, the Trump administration claims that they are Chinese officials who “want to do a lot of business” because “their economy collapses”.

“They said we were initiated? Well, I think they should go back and study their files,” Trump said in the White House on Wednesday.

But as the conversations got closer, the president hit a more diplomatic note: “We can all play games. Who made the first call that did not make – it doesn’t matter,” he said reporters on Thursday. “It only matters what is happening in that room.”

The timing is also the key to Beijing because it is during Xi’s visit to Moscow. He was a guest of honor on Friday at the Victory Day parade of Moscow to commemorate the 80th anniversary of the victory of the Second World War over Nazi Germany.

XI stood next to leaders from the entire Global South – a memory of Trump’s administration that not only has other trade options, but that it also presents itself as an alternative world leader.

This allows Beijing to project strength, even if it goes to the negotiating table.

Trump insists that the rates will make America stronger, and Beijing has sworn to “fight to the end”- but the fact is that the taxes hurt both countries.

According to the government data, the factory output in China has taken a hit. Production activity fell to the lowest level since December 2023 in April. And a study by News Outlet Caixin showed this week that service activity has reached a low-seven months.

The BBC discovered that Chinese exporters of the steep rates are staggering, with Stock stacking in warehouses” Even if they make a challenging note and seek markets outside the US.

“I think (China) realizes that a deal is better than not a deal,” says Bert Hofman, a professor at the East Asian Institute in National University Singapore.

“So they took a pragmatic picture and said,” Okay, we have to get these conversations going. “

And so civil servants in Beijing have decided that the time is to talk to the big holiday in China in China.

On the other hand, the uncertainty caused by rates led the US economy to contract for the first time in three years.

And industries that have long been dependent on Chinese goods are mainly concerned. An owner of a toy company in Los Angeles told the BBC That they “looked at the total implosion of the supply chain”.

Trump himself has recognized that American consumers will feel the sting.

American children can “have two dolls instead of 30 dolls,” he said during a cabinet meeting this month, “and maybe the two dolls will cost a few dollars more than normal”.

Trump’s approval classifications have also led the fears for inflation and a possible recession, in which more than 60% of Americans said he focused too much on rates.

“Both countries feel busy offering a little reassurance to more and more nervous markets, companies and domestic constituents,” says Olson.

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

Although the conversations are confronted with optimism, a deal can take a while to materialize.

The conversations will mainly be about “touching basis”, Mr Hofman said, adding that this could look like an “exchange of positions” and, if all goes well, “an agenda (will be) set for future conversations”.

The negotiations in general are expected to take months, just like what happened during Trump’s first term.

After almost two years of tit for tat rates, the US and China drew a “phase one” deal at the beginning of 2020 to suspend or reduce some taxes. Even then it didn’t include Thornier ProblemsSuch as Chinese government subsidies for important industries or a timeline for scrapping the remaining rates.

In fact, many of them remained in place through the presidency of Joe Biden, and the latest rates from Trump contribute to those older taxes.

What could arise this time is a “phase one deal for steroids,” said Mr Olson: That is, it would go beyond the earlier deal and try to tackle flash points. There are many of them, The illegal fentanyl trade that Washington wants China to be harder Up to Beijing’s relationship with Moscow.

But all that is far along the line, experts warn.

“The systemic frictions that the trade relationship of the US-China Bedsen will not be solved quickly,” adds Mr Olson.

“Geneva will only produce anodyne agreements about ‘Frank Dialogues’ and the desire to keep talking.”