Trade talks signal hope of stability, experts say

The latest US-China trade talks in Kuala Lumpur, Malaysia, mark a critical juncture for steadying economic ties between the world's two largest economies, US experts said.

Anthony Moretti, department head and an associate professor in the Communication and Organizational Leadership Department at Robert Morris University, said the latest round's importance in stabilizing and growing bilateral ties was "timely yet challenging".

"As always, assessing importance is not that easy when one side seems determined to change course at a moment's notice and often for unclear reasons," Moretti told China Daily. "But if the US is to be believed, when it says it wants to build a substantial and long-lasting trade deal with China, then these talks come at an opportune time."

Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, called the discussions "critical", while warning of divergent paths ahead.

"If the talks go well, the world will enjoy a tariff truce during 2026," Hufbauer told China Daily. "If the talks go badly, the world will endure tariff bursts in 2026."

The two days of negotiations, held on Saturday and Sunday, involved China's Vice-Premier He Lifeng and top US officials, including Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer.

A US Treasury spokesperson described the sessions as "very constructive", according to Reuters on Saturday. China's Ministry of Commerce announced that the delegations reached "basic consensuses" on addressing trade concerns, including export controls, tariff suspensions, fentanyl measures and expanded cooperation. Moretti said that tariff pauses and adjustments to Section 301 rules, targeting China's shipping, logistics and shipbuilding, could ease pressure on companies if handled consistently.

"Businesses need stability, which fosters confidence in everything from planning, hiring, production, exports and more. We see consistency from Beijing. We must see it from Washington," Moretti said.

Hufbauer said those steps hold promise but require close examination. "That's a possible outcome," he said of pauses, boosting confidence and trade. "But companies will scrutinize the character and duration of pauses before committing new money to expanded trade."

On global effects, both experts stressed the need for lasting results to support supply chains and growth.

Moretti said durability is essential amid mounting strains.

"It has to last; there is no other alternative," he said.

Signs of pressure

"The signs of economic pressure in the US and throughout Western Europe are everywhere. They will only get worse if tariffs remain high, if supply chains are restricted, if business leaders delay important decisions," Moretti said, foreseeing broader benefits with endurance in place.

"A durable tariff truce would give a real lift to business confidence and world growth," Hufbauer said. "But firms will question whether a tariff truce will last beyond the November 2026 midterm elections."

"Respecting a position held by the other side is not a form of weakness. It definitely is a sign of respect. What the US side must avoid is a grandstanding moment, one in which there is unnecessary drama or a staged event that does nothing but allow the president to draw attention to himself," Moretti said.

Hufbauer outlined specific expectations.

The talks build on a truce from earlier rounds in Geneva, London and Stockholm, after the US imposed export blacklists in late September and China fought back with countermeasures.

Markets on Monday welcomed the progress, with the S&P 500 rising about 1.2 percent to a record close above 6,800 and gold futures pulling back below $4,000 per ounce as risk appetite grew, according to Bloomberg and CNBC.

Wendy Cutler, former acting US Trade Representative and senior vice-president at the Asia Society Policy Institute, welcomed the Kuala Lumpur framework as a positive development in a Reuters analysis on Monday. "The agreements focused on cooperation rather than hard commitments," Cutler said.

yifanxu@chinadailyusa.com