United States and China move forward with trade talks, potentially setting stage for a potential Trump-Xi meeting
US-China Trade Talks in Stockholm Aim to Extend Tariff Pause
In a fresh attempt to steady relations between the United States and China, US Treasury Chief Scott Bessent and China's Vice Premier He Lifeng met in Stockholm on Monday for face-to-face talks. The discussions focused on negotiating an extension of the tariff truce as a vital step toward a comprehensive trade agreement.
The previous US-China trade talks in Geneva, London, and now Stockholm have primarily revolved around extending the pause on tariffs imposed by both countries. Both sides aim to continue the 90-day suspension of reciprocal tariffs – the US on Chinese goods and China’s countermeasures – but have diverged on the timing and specifics of this extension.
The Stockholm talks follow Trump's largest trade deal yet with the European Union, announced on Sunday. However, no formal trade deal was concluded in Stockholm, as final approval depends on US President Trump. The US delegation emphasized that "nothing is agreed until we communicate with President Trump."
The broader context involves managing the global economic impact of tariffs. The International Monetary Fund (IMF) has noted that tariff reductions have enabled a slight global growth forecast increase, but warned that any tariff escalations could worsen economic uncertainty.
The meetings are described as "constructive" and "wide-ranging," showing a willingness from both sides to moderate their language and create conditions for higher-level meetings. Analysts say the US-China negotiations are far more complex than those with other Asian countries and will require more time.
The US has paused curbs on tech exports to China to avoid disrupting trade talks with Beijing and support Trump’s efforts to secure a meeting with Xi this year. However, US senators from both major parties plan to introduce bills this week targeting China over its treatment of minority groups, dissidents, and Taiwan, which could complicate talks in Stockholm.
Taiwan President Lai Ching-te is set to delay an August trip to the United States, potentially avoiding a situation that could infuriate Beijing and possibly derail the trade talks.
Discussions are expected to resume on Tuesday. So far, the talks have not delved into broader economic issues such as US complaints about China's state-led, export-driven model and Beijing's complaints about US national security export controls on tech goods.
The extension of a tariff and export control truce between China and the United States is likely, with another 90-day extension being a possibility. The extension would facilitate planning for a potential meeting between Trump and Chinese President Xi Jinping, scheduled for late October or early November.
Scott Kennedy, a China economics expert at the Centre for Strategic and International Studies in Washington, stated that the Geneva and London talks were aimed at getting the relationship back on track so that they could negotiate about the issues which animate the disagreement between the countries in the future. The Stockholm talks are a continuation of this effort, with both sides hoping to find a path forward to a more stable and prosperous relationship.
[1] Reuters [2] Bloomberg
- Despite the ongoing US-China trade talks in Stockholm, US senators are planning to introduce bills this week targeting China's treatment of minority groups, dissidents, and Taiwan, which could potentially complicate the negotiations.
- The extension of a tariff and export control truce between China and the United States is expected, with another 90-day extension being a possibility, facilitating planning for a potential meeting between Trump and Chinese President Xi Jinping.
- In the realm of personal-finance and business, the US-China trade talks have revolved around extending the pause on tariffs and tariff reductions, with the broader context involving managing the global economic impact.
- The US-China negotiations, as described by Scott Kennedy of the Centre for Strategic and International Studies, are far more complex than those with other Asian countries, requiring more time, and are aimed at finding a path forward to a more stable and prosperous relationship, not just in finance and industry, but also in general-news, politics, and technology.
