Global Markets Watch As US And China Restart Critical Trade Talks

The Post On Sunday

Senior officials from the United States and China have launched a new round of high-level economic talks in Europe ahead of an anticipated summit between their presidents, Donald Trump and Xi Jinping, expected to take place in Beijing later this month.

The preliminary discussions began on Sunday in Paris, where US Treasury Secretary Scott Bessent met Chinese Vice Premier He Lifeng at the headquarters of the Organisation for Economic Co‑operation and Development (OECD).

The two-day meeting is aimed at addressing a range of trade and economic issues that have strained relations between the world’s two largest economies in recent years.

Officials familiar with the discussions say the agenda is expected to cover several contentious areas, including adjustments to US tariffs on Chinese goods, the flow of Chinese-produced rare earth minerals and magnets to American manufacturers, US export restrictions on high-technology products, and China’s purchases of American agricultural commodities.

The Paris talks come after a turbulent period in US-China economic relations, marked by an intense trade war throughout much of 2025. At the height of the dispute, reciprocal tariffs between the two countries reached triple-digit levels, raising fears of severe disruptions to global supply chains, particularly for critical minerals and manufacturing inputs.

Although tensions eased somewhat following a meeting between Trump and Xi in Busan, South Korea, in October last year, new investigations launched by Washington into alleged Chinese industrial overcapacity and claims of forced labour have once again threatened to destabilise the fragile détente between the two economic superpowers.

China’s Ministry of Commerce confirmed that the Paris discussions would involve consultations on “economic and trade issues of mutual concern”, though officials stopped short of outlining specific outcomes expected from the negotiations.

Bessent, who is accompanied by US Trade Representative Jamieson Greer, said the economic dialogue between Washington and Beijing was progressing despite ongoing disagreements.

Diplomats view the Paris meeting primarily as groundwork for the anticipated summit between Trump and Xi. Washington has indicated that Trump is expected to visit China from March 31 to April 2, although Beijing has yet to formally confirm the dates in keeping with its usual diplomatic practice.

Analysts suggest the two leaders could meet as many as three times this year, including at a China-hosted summit of the Asia‑Pacific Economic Cooperation (APEC) in November and at a US-hosted Group of Twenty (G20) summit scheduled for December.

While expectations for an immediate breakthrough remain modest, even maintaining dialogue is viewed by observers as an important step in preventing a further escalation of tensions.

The diplomatic engagements between Washington and Beijing are unfolding against a backdrop of heightened geopolitical instability, particularly the escalating conflict involving Iran.

Energy markets have been shaken by the widening war involving Iran and Israel, as well as threats to global oil supplies flowing through the strategically vital Strait of Hormuz.

China, a major importer of Middle Eastern crude oil, relies heavily on shipments passing through the narrow waterway. Estimates suggest that roughly 45 percent of China’s oil imports transit the strait, making stability in the region a critical concern for Beijing.

China has traditionally maintained close ties with Tehran and has criticised the killing of Iran’s former supreme leader Ali Khamenei, while at the same time condemning Iranian missile strikes targeting Gulf states.

The issue is expected to feature prominently in the discussions in Paris, particularly as oil prices surge and fears mount over potential disruptions to global shipping routes.

With global markets already under strain, many analysts believe that even limited progress in US-China economic cooperation could help stabilise the fragile international economic environment.

China’s state-run news agency Xinhua News Agency noted in a commentary that meaningful cooperation between the two powers could help restore investor confidence and ease volatility in global markets.

However, experts caution that expectations for a major breakthrough during the Paris talks should remain modest.

Scott Kennedy, a China economics specialist at the Center for Strategic and International Studies, said both sides are likely focused primarily on maintaining dialogue rather than achieving sweeping policy changes.

“Both sides, I think, have a minimum goal of having a meeting, which sort of keeps things together and avoids a rupture and re-escalation of tensions,” Kennedy said. Aljezeera

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