U.S. and China plan to initiate fresh trade negotiations, paving the way for a potential Trump-Xi summit.
In a series of high-stakes meetings, top US and Chinese economic officials gathered in Stockholm this week to address ongoing economic disputes between the two nations. The talks, which aimed to extend a truce by three months and prevent sharp tariff increases, are expected to result in a 90-day extension of the current tariff truce [1][4][5].
Scott Kennedy, a China economics expert, predicted this outcome, stating that an extension of the tariff truce for another 90 days is the most likely outcome [1]. This extension maintains the pause on reciprocal tariffs while deferring major breakthroughs or structural trade agreements.
Both sides expressed satisfaction with the implementation of prior agreements and agreed to continue pushing for the tariff pause. However, no immediate new deal has been finalized without higher-level approval from U.S. President Trump [1][4][5].
Potential agreements or concessions being discussed include extending the pause on the 24% tariffs on U.S. goods and corresponding Chinese countermeasures for another three months to maintain economic stability amid global pressures [1][4].
Addressing "major irritants" such as China's industrial overcapacity and its insufficient control over chemicals used to produce fentanyl, key issues in U.S. concerns, might be part of future commitments [2]. Discussions on structural reforms including improved market access for U.S. companies in China and supply chain issues are also on the table, although these are unlikely to yield immediate concrete commitments at this stage [2][4].
The talks also set the stage for a possible upcoming leaders’ summit between Trump and Xi Jinping, with deeper, detailed preparations likely required before any major deals are agreed [2].
The Stockholm talks follow Trump's recent trade deal with the European Union, which includes a 15% tariff on most EU goods exports to the US [6]. The US is poised to impose new sectoral tariffs on China within weeks, affecting sectors such as semiconductors, pharmaceuticals, ship-to-shore cranes, and other products [7].
Without an agreement, global supply chains could face renewed turmoil due to US duties returning to triple-digit levels [8]. Sun Chenghao, a fellow at Tsinghua University's Centre for International Security and Strategy in Beijing, believes that a Trump-Xi summit could be an opportunity for the US to lower the 20% tariffs on Chinese goods related to fentanyl, in exchange for increased US farm product purchases by China [3].
China's control over the global market for rare earth minerals and magnets has proven to be an effective leverage point on US industries [9]. Beijing has argued that such purchases from the US would help reduce the US trade deficit with China, which reached $295.5 billion in 2024 [10].
US Treasury Secretary Scott Bessent has expressed a desire for China to rebalance its economy away from exports towards more domestic consumption, a decades-long goal for US policymakers [11]. Analysts suggest that the US-China negotiations are more complex than those with other Asian countries and will require more time [12].
In conclusion, the US-China economic talks in Stockholm serve as a platform to manage tensions by extending the tariff truce and conduct candid economic exchanges while laying groundwork for further negotiations. Lasting resolutions on complex trade issues and structural reforms remain deferred, pending higher-level political engagement [1][2][4][5].
[1] Reuters [2] Bloomberg [3] CNN [4] Wall Street Journal [5] The New York Times [6] CNBC [7] Politico [8] Forbes [9] The Diplomat [10] The South China Morning Post [11] The Washington Post [12] The Economist
- The US-China economic talks in Stockholm have been extended for another 90 days, following predictions by Scott Kennedy, a China economics expert [1].
- The extension maintains the pause on reciprocal tariffs, deferring major breakthroughs or structural trade agreements [1].
- Without an agreement, global supply chains could face renewed turmoil if US duties return to triple-digit levels [8].
- The talks have set the stage for a possible upcoming leaders’ summit between Trump and Xi Jinping, with deeper, detailed preparations likely required before any major deals are agreed [2].
