Inside the Surprise U.S.-China Trade Deal: A Comprehensive Summary

Published on May 13, 2025

Hosts: Ryan Knutson and Jessica Mendoza
Produced by: The Wall Street Journal & Gimlet, Spotify

1. Introduction: A Tumultuous Trade Landscape

In the episode titled "Inside the Surprise U.S.-China Trade Deal" from The Journal, hosts Ryan Knutson and Jessica Mendoza delve deep into the unexpected détente between the United States and China amidst an intense trade war. This episode provides an in-depth analysis of the negotiations, the key players involved, and the broader implications for global markets and future international trade relations.

2. Brian Schwartz’s High-Stakes Reporting from Geneva

The narrative is anchored by the on-the-ground reporting of Brian Schwartz, an economic policy correspondent for The Wall Street Journal. Brian recounts his whirlwind trip to Geneva, Switzerland, where crucial trade negotiations were unfolding between the U.S. and China.

Brian Schwartz [00:08]: "It was wild. It was a crazy few days. We landed on a Friday and it just carried in for 72 hours of pure nonstop work. We did not stop working. It was nuts."

Despite the high level of secrecy surrounding the meetings, Brian took proactive steps to uncover the developments. Determined to gain firsthand insights, he discreetly followed U.S. Treasury Secretary Scott Besant and his entourage to the negotiations.

Brian Schwartz [02:02]: "I decided to follow them there. So I ran to a taxi... Get out of the car."

This bold move led him to a private estate where the U.S. delegation was negotiating a temporary truce in the ongoing trade conflict.

3. Key Figures: Scott Besant and Jameson Greer

At the heart of the negotiations were two pivotal figures:

• Scott Besant, U.S. Treasury Secretary: Described as the cornerstone of the negotiations, Besant's leadership was instrumental in brokering the deal.

  Brian Schwartz [04:15]: "He has been critical for this. And to tell you the truth, if it wasn't for Scott Benson leading the way, I don't know if this would have happened."

• Jameson Greer, U.S. Trade Representative: Serving as Besant's close ally, Greer complemented Besant's approach, creating a formidable team that the Chinese delegation found both reassuring and effective.

Brian Schwartz [06:56]: "They are thick as thieves. I mean, they are clearly very close. ... Scott Bessant is the leader in a way because he's more senior from Wall Street."

Their collaborative dynamic, likened to "Batman and Robin," played a crucial role in navigating the complexities of the trade negotiations.

4. Unveiling the Trade Deal: Key Terms and Provisions

The culmination of the weekend's negotiations was a temporary truce, marking a significant shift in U.S.-China trade relations. The deal primarily involved a reduction in tariffs and a pause in escalating trade tensions.

Tariff Adjustments

• United States to China:

  • Baseline Tariffs: Reduced from a staggering 145% to 10% on Chinese imports.
  • Fentanyl-Related Tariffs: Maintained an additional 20% tariff linked to concerns over fentanyl distribution.

  Brian Schwartz [04:15]: "... it's give or take, 30% tariffs now. ... down to 10% on Chinese goods."

• China to United States:

  • Reciprocal Tariffs: Lowered from 125% to 10% on U.S. exports to China, mirroring the reduction in American tariffs.

Duration and Future Negotiations

The agreement is set to last for 90 days, providing a window for both nations to stabilize their economic interactions and pave the way for more comprehensive negotiations.

Brian Schwartz [13:17]: "I think that there's going to be future talks. The expectation is in a matter of weeks they're going to be talking again."

5. The Fentanyl Factor: A Lingering Contention

While the trade deal addressed numerous economic tensions, the issue of fentanyl trafficking remained unresolved. The U.S. placed significant emphasis on China's alleged role in the illicit fentanyl trade, a point of contention that Beijing staunchly denies.

Scott Besant’s Stark Illustration

During a pivotal moment in the negotiations, Besant used a chilling analogy to underscore the deadly impact of fentanyl:

Brian Schwartz [09:52]: "Scott, Besant sat down with China counterparts and picked up, there was a plate of sugar on the table. And he takes a little bit of sugar and says, this is how much could kill a single person. Then he picks up a little bit more and he says, this is how much could kill people across Geneva in terms of fentanyl."

Despite the gravity of the discussion, the two sides could not reach a consensus on fentanyl, although China's willingness to engage a senior official in the talks was viewed positively by the U.S. delegation.

6. Credit Where It's Due: Scott Besant’s Pivotal Role

The success of the trade deal is largely attributed to Scott Besant, whose unwavering commitment and strategic approach earned him President Trump's trust to negotiate high-stakes agreements.

Loyalty and Leadership

Besant's loyalty to President Trump and his ability to provide candid, data-driven advice without overstepping were essential in bridging gaps during negotiations.

Brian Schwartz [05:22]: "It was loyalty. Scott Besant was during the campaign one of the handful of Wall street financiers who's willing to go on a limb and say, I am supporting Donald Trump."

Professional Demeanor

Besant's calm and composed demeanor contrasted with more aggressive counterparts, fostering a more conducive environment for dialogue with Chinese officials.

Brian Schwartz [06:56]: "He's very direct. But there's a difference between being that way and being kind of a brawler."

His ability to maintain professionalism without appearing confrontational was instrumental in achieving the temporary truce.

7. Market Reactions and Economic Implications

The announcement of the trade deal sent ripples through global markets. Immediate reactions included:

• Stock Markets: Significant surges across U.S. and international markets.
• Currency Fluctuations: The U.S. dollar appreciated against major currencies.
• Bond Yields: Increased, reflecting market optimism.
• Consumer Impact: E-commerce giants like Temu, Shine, and Amazon began raising prices, a direct consequence of tariff adjustments.
• Business Strategies: Some companies started stockpiling goods from China, while others re-evaluated their supply chain strategies.

Brian Schwartz [12:41]: "I think that, as the President said, in these negotiations with China and other countries, the US Holds the cards."

The temporary nature of the deal offers a brief respite but underscores the volatility and unpredictability of U.S.-China trade relations.

8. Broader Implications: Negotiating with the U.S. Going Forward

The trade deal serves as a precedent for future negotiations between the U.S. and other nations. Key takeaways include:

• U.S. Assertiveness: The Trump administration's firm stance has pressured other countries to engage more earnestly in trade talks.

  Brian Schwartz [14:35]: "It has put the squeeze on a lot of countries to come to the table and renegotiate trade deals and renegotiate business with the United States."

• Realistic Expectations: Success hinges on bringing reasonable and attainable objectives to the negotiation table, as evidenced by China's approach.

• Long-Term Strategy: While the immediate impact is a reduction in tariffs, the long-term trajectory remains uncertain, with expectations of ongoing dialogues to address deeper trade issues.

9. Conclusion: A Momentous but Temporary Victory

The episode underscores the significance of the temporary truce in U.S.-China trade relations, highlighting the strategic maneuvering by key U.S. officials and the cautious optimism surrounding the deal. While the immediate effects are largely positive, the ephemeral nature of the agreement suggests that this is merely a stepping stone towards more comprehensive and lasting solutions.

Brian Schwartz [12:43]: "Yes, 100% in, a major win. ... it is a momentous moment for Scott Bessen's career as Treasury Secretary."

As global economies continue to navigate the complexities of international trade, the U.S.-China trade deal stands as a testament to the delicate balance of power, diplomacy, and strategic negotiation in shaping the future of global commerce.

Additional Reporting by Jason Dougl, Rebecca Fung, and Ling Ling Wei

Key Quotes

• Brian Schwartz [00:08]: "It was wild. It was a crazy few days. We landed on a Friday and it just carried in for 72 hours of pure nonstop work. We did not stop working. It was nuts."

• Brian Schwartz [04:15]: "... it's give or take, 30% tariffs now. ... down to 10% on Chinese goods."

• Brian Schwartz [09:52]: "Scott, Besant sat down with China counterparts and picked up, there was a plate of sugar on the table. And he takes a little bit of sugar and says, this is how much could kill a single person. Then he picks up a little bit more and he says, this is how much could kill people across Geneva in terms of fentanyl."

• Brian Schwartz [12:43]: "Yes, 100% in, a major win. ... it is a momentous moment for Scott Bessen's career as Treasury Secretary."

This comprehensive summary encapsulates the intricate dynamics of the U.S.-China trade negotiations as reported in The Journal's episode. It offers a detailed exploration of the strategies, personalities, and economic ramifications involved, providing listeners and readers alike with a clear understanding of this pivotal moment in international trade relations.