Senior economic officials from the United States and China have commenced new talks in Stockholm with the goal of extending the current pause on mutual tariffs, a move seen as vital to averting another escalation in the trade war between the world’s two largest economies. The discussions, which began Monday, come as the current 90-day tariff ceasefire draws to a close, with the deadline for its expiration set for August 12.
Key Developments
- Expected Extension: Various high-level sources indicate Beijing and Washington are likely to prolong their truce by another 90 days. Both sides are expected to commit to refraining from imposing further tariffs or intensifying other trade restrictions during this period.
- Delegation Leaders: The U.S. is represented by Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer, while Vice Premier He Lifeng heads the Chinese delegation. These meetings mark the third formal round of economic negotiations since significant tariffs were applied earlier this year.
- Broader Context: The U.S.-China talks in Sweden follow President Donald Trump’s announcement of landmark trade agreements with the European Union and Japan in the past week. These deals have seen the introduction of a new minimum tariff rate of 15% on a wide range of partner goods, shaping the overall trade landscape and raising pressure on China negotiations.
- U.S. calls for reducing Chinese industrial overcapacity.
- Disputes over U.S. tariffs related to fentanyl trafficking.
- U.S. concerns about Chinese purchases of sanctioned Russian and Iranian oil.
- Difficulties faced by U.S. businesses with China’s licensing rules for access to rare earths and sensitive materials.
Ongoing Issues
While the likely extension buys critical time and eases immediate market anxiety, officials on both sides caution that major breakthroughs are unlikely in the current round. Instead, discussions are expected to focus on persistent sticking points, such as:
Market and Political Impact
The talks unfold against a backdrop of global economic uncertainty and mounting business concerns about increased costs and supply chain disruptions. With U.S. tariffs on Chinese imports currently capped at 30% (and China’s at 10%), both governments are under pressure to avoid a return to triple-digit levies which could functionally become trade embargoes.
The extension is also seen as paving the way for a potential high-profile summit between President Trump and President Xi Jinping, expected to take place in late October or early November. In the interim, the truce provides a critical window for further negotiation and signals a willingness from both sides to maintain at least temporary stability.
In summary, officials expect this week’s Sweden talks to produce another 90-day pause in the U.S.-China tariff standoff. While deeper disagreements linger, for now, the extension will help global markets sidestep immediate shocks and set the stage for careful, continued diplomacy.
