Editor's note: Liu Chunsheng, a special commentator on current affairs for CGTN, is an associate professor at the Beijing-based Central University of Finance and Economics. The article reflects the author's opinion and not necessarily the views of CGTN.

Since the U.S. launched its "Tariff D-Day" in April 2025, the global economy has been on tenterhooks. As the world's two largest economies, the direction of China-U.S. economic and trade relations has a pivotal impact on the global landscape. Fortunately, in recent months, the two sides have engaged in positive interactions, and multiple high-level economic and trade talks have yielded remarkable results, bringing a glimmer of hope to the tense economic and trade situation. The Chinese and U.S. delegations convened in Madrid, Spain on September 14 for talks on economic and trade issues.

Fruitful talks herald warming relations

The high-level economic and trade talks held in Geneva, Switzerland, in May 2025 marked a crucial turning point. Beyond the significant reduction in tariffs, the breakthrough lies in ending the deadlock in previous economic and trade dialogues and rebuilding the foundation of mutual trust for consultation. This "mutual effort" has completely reversed the previous confrontational cycle of "retaliatory tariff hikes" and sent a clear signal to the world that "dialogue is better than confrontation."

After the release of the Joint Statement on the China-U.S. Geneva Economic and Trade Talks, the capital market responded positively almost immediately, reflecting enterprises' confidence in lower trade costs and stable market expectations.

In June, the first meeting of the China-U.S. Economic and Trade Consultation Mechanism in London, UK, was of core value in transforming the "phased achievements" of the Geneva talks into a "normalized mechanism." The two sides reached a principled agreement on the framework for implementing the consensus, shifting the previously "top-driven" economic and trade dialogue to a track of "institutional guarantee." This change is crucial as it reduces the over-reliance of economic and trade relations on the political cycle and avoids the recurrence of "talk results fluctuating with political situations." The U.S. statement of "working with China towards the same goal" broke its previous inertia of "taking pressure as a prerequisite" in economic and trade dialogues, marking the two sides' shift to handling differences through "equal consultation"– a change in atmosphere with more long-term significance than specific outcomes.

In July, the new round of talks in Stockholm, Sweden, further consolidated the "stability" of economic and trade relations. The decision to "extend the suspension" of the 24 percent reciprocal tariffs and countermeasures, though seemingly a "continuation of achievements," served as a vital "reassurance" for market expectations. For enterprises, the "stability" of trade policies matters more than "preferential intensity." Amid concerns over "uncertainty risks" from policy reversals, this extension sent a clear signal that "short-term policies will not be reversed," encouraging enterprises to invest in expanding production and exploring markets. Data showed a significant rebound in orders from both sides within a week after the talks, a direct economic effect of policy stability.

Globally, the achievements of the three rounds of talks may not only benefit China and the U.S. but also act as a "stabilizer" for the global economy. For small and medium-sized economies dependent on the Chinese and U.S. markets – such as Southeast Asian countries relying on Chinese intermediate goods imports and Latin American countries on U.S. agricultural product demand – the warming China-U.S. trade has driven their export growth, forming a win-win and globally beneficial cycle.

Pragmatic cooperation breaks new ground

Driven by the talks, China and the U.S. have made progress in pragmatic cooperation, with rare earths as a key example. As an indispensable raw material in new energy, electronics, and aerospace, rare earths were once a source of friction. After recent talks, China has approved eligible export applications in accordance with the relevant laws, demonstrating responsibility, while the U.S. has recognized the importance of stable rare earth supply chains and has adjusted policies to reduce unreasonable restrictions. This benefits Chinese rare earth enterprises in expanding international markets and ensures stable raw material supply for U.S. industries.

Cooperation prospects also exist in agriculture and energy. With lower tariffs and an improved trade environment, U.S. agricultural exports to China are expected to rebound, which is crucial for the economic development of U.S. agricultural states and farmers' income stability. In energy, the two sides have great potential in clean energy technology R&D and efficient energy use. Joint efforts here can diversify their energy needs and contribute to global energy transition and sustainable development.

Positive progress and future challenges

These positive developments have laid a solid foundation for the future of China-U.S. economic and trade relations. International public opinion has generally welcomed the results, viewing them as a much-needed respite for the global economy and a major relief from trade friction uncertainties.

However, the path to improved relations is not smooth. Despite phased progress on tariffs, the U.S. still retains tariffs in key areas, with uncertainties about future policy reversals. Non-tariff barriers such as investment and market access restrictions remain prominent, involving deep-seated issues like domestic laws and industrial policies that are hard to resolve. Additionally, structural differences in technical standards and industrial policies require long-term and arduous negotiations.

Looking ahead, both sides should cherish the hard-won achievements, uphold the spirit of mutual openness, continuous communication, cooperation, and mutual respect, and advance the effective operation of the economic and trade consultation mechanism. In future talks, they should focus on key areas to seek more win-win solutions. For China, it is essential to seize opportunities to expand trade with the U.S. and promote industrial development while strengthening independent innovation to enhance industrial competitiveness and reduce reliance on external changes.

As the world's two largest economies, China and the U.S. should shoulder greater responsibilities, strengthen cooperation to address global challenges such as climate change and the global debt crisis, and inject sustained impetus into global economic prosperity and stability.

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