The increasingly ugly trade spat between Washington and Beijing has rocked financial markets and raised fears of a global economic slowdown, and an inflationary spike in the United States.

"We've made substantial progress between the United States and China in the very important trade talks," US Treasury Secretary Scott Bessent told reporters in Geneva after the second day of discussions.

"The talks were productive," he said, taking no questions but promising a "complete briefing" Monday on the outcome.

In a statement Sunday, which did not provide any additional details, the White House hailed what it called a new "trade deal" with China.

China's Vice Premier He Lifeng told reporters the meetings had achieved "substantial progress," echoing Bessent's remarks, and described the atmosphere as "candid, in-depth and constructive." 

"This is an important first step," He said, adding there were plans for a joint communique to be published Monday.

The two sides have agreed to set up a joint mechanism focused on "regular and irregular communications related to trade and commercial issues," China's international trade representative Li Chenggang said at the same briefing. 

Asked if the communique would arrive before financial markets opened, Li replied: "If the dishes are delicious, timing is not a matter." 

"Whenever released, it is going to be big, good news," he said. 

The meetings marked the first time senior officials from the world's two largest economies have met face-to-face over trade since Trump slapped steep new levies on China totaling 145 percent, with cumulative US duties on some Chinese goods reaching a staggering 245 percent.

In retaliation, China put 125 percent tariffs on US goods.

"These discussions mark a significant step forward and, we hope, bode well for the future," World Trade Organization chief Ngozi Okonjo-Iweala said in a statement shortly after her own meeting with He Lifeng.

"Amid current global tensions, this progress is important not only for the US and China but also for the rest of the world, including the most vulnerable economies," she added. 

Devil in the details

"It's definitely encouraging," Asia Society Policy Institute (ASPI) vice president Wendy Cutler told AFP after the talks had concluded.

"The two sides spent over 15 hours in discussions," she said. "That's a long time for two countries to be meeting, and I view that as positive."

Ahead of the meetings at the discrete villa residence of Switzerland's ambassador to the United Nations in Geneva, Trump signaled he might lower the tariffs, suggesting on social media that an "80 percent Tariff on China seems right!"

However, White House Press Secretary Karoline Leavitt later clarified that the United States would not lower tariffs unilaterally. China would also need to make concessions, she said.

The fact the talks are even happening "is good news for business, and for the financial markets", Gary Hufbauer, a senior non-resident fellow at the Peterson Institute for International Economics, said in an interview while the talks were ongoing.

But Hufbauer cautioned he was "very skeptical that there will be any return to something like normal US-China trade relations". Even a tariff rate of 70-80 percent would still potentially halve bilateral trade, he said.

"The devil will be in the details," said Cutler from ASPI. "Without the details, it's hard to assess whether the meeting was successful or not."

‘Great progress’

China's vice premier went into the discussions buoyed by Friday's news that China's exports rose last month despite the trade war.

The unexpected development was attributed by experts to a re-routing of trade to Southeast Asia to mitigate US tariffs.

The Geneva meeting comes after Trump unveiled a trade agreement with Britain, the first with any country since he unleashed his blitz of global tariffs.

The five-page, non-binding deal confirmed to nervous investors that Washington is willing to negotiate sector-specific relief from recent duties. But Trump maintained a 10 percent baseline levy on most British goods.

In a Truth Social post Saturday, Trump said the talks had made "GREAT PROGRESS!!"

"We want to see, for the good of both China and the US, an opening up of China to American business," he added.