US and Chinese officials will meet to 'break the ice' in Geneva.

News of the meeting, released late on May 6th, caused US stock index futures to surge, as trading resumed after two consecutive days of declines on Wall Street due to uncertainty surrounding President Donald Trump's "tsunami of tariffs." S&P 500 emini futures rose approximately 1%.

The meeting with the Chinese Vice Premier will take place after months of escalating tensions, which have seen trade tariffs between the world's two largest economies soar well above 100%. This will be the first meeting between senior Chinese and US officials since US Senator Steve Daines met with Premier Li Qiang in Beijing in March.

Two sources familiar with the plan told Reuters that the two sides are expected to discuss cuts to broader tariffs. The sources said negotiating teams are also expected to discuss removing tariffs on specific products and U.S. policy onde minimis(the value threshold below which imported goods are exempt from tariffs) and the US export control list.

The Chinese State Council did not immediately respond to requests for comment sent by Western media via fax.

According to Reuters, Washington and Beijing have been locked in a "cat and mouse game" over tariffs, with neither side wanting to be seen as making concessions in a trade war that has shaken global markets and disrupted supply chains.

The U.S. Trade Representative (USTR) and the Treasury Department said that Greer and Bessent will travel together to Geneva on May 8 and will also meet with Swiss President Karin Keller-Sutter to discuss bilateral trade negotiations.

"My feeling is that this meeting will aim to de-escalate," Bessent told Fox News Channel's "The Ingraham Angle" after the announcement. "We have to de-escalate before we can move forward."

Following the US announcement, a spokesperson for the Chinese Ministry of Commerce confirmed that China had agreed to meet with US envoys.

"Based on a full consideration of global expectations, China's interests, and the calls of American industry and consumers, China has decided to re-engage with the United States," the Chinese statement said.

"There's an old Chinese proverb: Listen to their words, observe their actions. ... If (the US) says one thing and does another, or tries to use negotiations as a cover to continue coercion and blackmail, China will never agree."

Trump and his trade team have sent mixed signals about progress in negotiations with major trading partners who are scrambling to solidify deals with Washington and avoid heavy import tariffs on their goods.

Mr. Bessent told lawmakers earlier that day that the Trump administration was negotiating with 17 major trading partners, but not China, and could announce trade agreements with some of them as early as this week.

Trump told reporters ahead of a meeting with Canadian Prime Minister Mark Carney that he and top administration officials would review potential trade deals over the next two weeks to decide which ones to accept, triggering a stock market crash.

Bessent told Fox News that the two sides would work together at the May 10 meeting to determine "what to discuss."

"Look, we share an interest that this situation is unsustainable," Bessent said. "And 145%, 125% is equivalent to an embargo. We don't want to be separated. What we want is fair trade."

Trade deficit increases

President Trump and top officials have held a series of meetings with trade partners since he announced 10% tariffs on most countries on April 2, with higher tariffs set to take effect on July 9 unless separate trade agreements are reached. Trump has also imposed 25% tariffs on automobiles, steel, and aluminum; 25% tariffs on Canada and Mexico; and 145% tariffs on China, with further tariffs expected on pharmaceuticals in the coming weeks.

China retaliated by raising tariffs on US goods to 125%. The European Union (EU) is also preparing countermeasures.

"I look forward to productive talks as we work toward rebalancing the international economic system to better serve U.S. interests," Bessent said in a statement.

Trump's tariff moves, which he says are partly aimed at reducing the U.S. trade deficit, are so far having the opposite effect. The U.S. Commerce Department said on May 6 that the trade deficit surged to a record high in March as businesses rushed to import goods before tariffs took effect. This data highlights a dynamic that has contributed to pushing gross domestic product (GDP) into negative growth in the first quarter of 2025 for the first time in three years.

In particular, efforts by pharmaceutical manufacturers to preempt the tariffs that Trump threatened to impose on the industry led to a record increase in pharmaceutical imports. However, it is noteworthy that the US trade deficit with China narrowed significantly as the heavy tariffs imposed by Trump drastically reduced imports from China.

"Landing Zone" for an Agreement with the UK

The US and UK have made good progress in negotiating a trade deal that could include lower tariff quotas on steel and cars, a British official said, while cautioning it was too early to predict when the agreement would be signed.

The negotiations, led by the USTR and the Department of Commerce on the US side, are expected to result in lower tariff quotas for steel and automobiles, while talks continue on the UK's digital services tax, the official added.

Prior to his meeting with Mr. Carney, Mr. Trump said the U.S.-Mexico-Canada Agreement (USMCA), signed during his first term and expected to be reviewed next year, could be renegotiated, although he questioned whether that was "really necessary."

Mr. Carney later told reporters that no decision on tariffs was made during his meeting with Mr. Trump.