Cautious optimism in Latin America as China and U.S. talk again

Editor's note: Zhou Jiaogui, Jia Jiabin and Gabriel Salgado are special commentators on current affairs for CGTN. The article reflects the authors' views and not necessarily those of CGTN.

China and the United States concluded a new round of trade talks in London with a preliminary agreement on a general framework to implement the understandings reached by both sides during last month's Geneva meeting. It marked only the second formal dialogue between the two sides since the start of this year's tariff dispute. While no detailed outcomes from the two-day negotiations have been disclosed, the meeting itself signals a shared interest in de-escalating tensions despite lingering differences.

This time, high-level officials led both delegations, indicating a broader agenda with a focus on solving structural issues. Talks revolved around rebuilding trust, addressing trade imbalances and preventing another tariff flare-up like the ones seen earlier this year. In this context, the very fact that such a senior-level meeting took place sends a clear message: Neither Washington nor Beijing can afford another surge in hostilities.

In April, U.S. President Donald Trump signed two executive orders introducing "reciprocal tariffs," triggering a wave of instability and uncertainty in global trade. While the White House initially projected confidence, May brought a sharp decline in cargo volumes at U.S. ports, alongside warnings of supply shortages and price hikes in retail and e-commerce.

According to the U.S. Department of Commerce, GDP contracted by an annualized 0.3 percent quarter-on-quarter in the first quarter of 2025 – its first decline since 2022. A Bloomberg survey found that 60 percent of U.S. consumers had cut back on spending due to recession fears. Meanwhile, the Financial Times reported a drop in investor confidence in U.S. assets, with capital shifting toward Europe and other markets.

The high economic cost of the trade war is reinforcing calls for dialogue. In their recent phone call, Chinese President Xi Jinping and Trump acknowledged the progress made in Geneva and committed to maintaining regular economic consultations based on mutual respect and shared benefit. Xi emphasized that China comes to the talks willing to negotiate – but not without principles – and stressed the importance of communication to prevent misunderstandings and to build a broader consensus.

This new meeting, directly pushed by both leaders, reveals a joint desire to stabilize the bilateral relationship after a tense period, and lends greater predictability to the future of economic exchanges between the two powers.

In today's interdependent global economy, the stability of U.S.-China economic ties has a direct impact on global trade and economic health. The London talks drew close attention from international markets: Asian stock exchanges reacted with cautious optimism, while in Europe and on Wall Street, restraint prevailed.

In Latin America, the media response was one of measured optimism. As Infobae reported, both sides are working to "sustain the fragile tariff truce agreed in Geneva this May amid rising bilateral tensions." Colombia's Corrillos called the talks "an opportunity to establish a more stable framework of cooperation – particularly at a time when trade disputes are directly impacting inflation, global supply chains and energy security."

Across the region, reactions reflected both hope and skepticism. According to Bloomberg Línea, the Mexican stock market showed signs of improvement "though concerns persist over the lack of concrete outcomes." From Argentina, Infobae noted that while Asian markets viewed the meeting favorably, "Western reactions remain cautious" given fears of a renewed U.S.-driven tariff escalation. On top of that, the Organization for Economic Co-operation and Development has already downgraded its global growth projections for the year.

Opinion outlets like Venezuela's Telesur stressed that the London talks reveal "how U.S. tariff pressure ends up hitting third countries," and called for a multilateral approach that includes Latin America in the solution. From San Jose, Costa Rica's La Nación warned that a robust outcome is essential for Central America, as a rise in prices from Asian imports – driven up by the trade war – has already raised local assembly costs.

From Tijuana to Ushuaia, the Latin American press is converging on a shared conclusion: A functioning dialogue between the world's two leading economies is no longer optional. Without it, inflation rises, supply chains break, and growth prospects across the region falter.

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