U.S. and China Resume High-Stakes Trade Talks in Stockholm Amid Tariff Truce Deadline

 Stockholm, July 28 — Senior economic officials from the United States and China are set to reconvene in Stockholm today for high-level negotiations aimed at defusing long-standing trade tensions between the world’s two largest economies. The talks, scheduled for the afternoon at Rosenbad—the office of the Swedish Prime Minister—are expected to focus on extending a critical 90-day tariff truce and preventing the reimposition of punitive duties.

National flags of both nations were hoisted outside the venue on Monday morning, signaling the start of another pivotal round in the ongoing trade standoff.

The diplomatic effort comes ahead of an August 12 deadline, by which China must secure a lasting tariff agreement with the administration of President Donald Trump. Recent interim accords struck in May and June had temporarily halted the escalation of tit-for-tat tariffs and a disruption in rare earth mineral supplies—key components in high-tech manufacturing.

Without a renewed agreement, global supply chains could once again be thrown into disarray as the U.S. threatens to reinstate tariffs that could effectively mirror a bilateral trade embargo.

The timing of the Stockholm dialogue follows President Trump’s announcement on Sunday of a landmark trade agreement with the European Union, which includes a 15% tariff on most EU exports to the U.S., including automobiles. While no major breakthrough is anticipated in the U.S.-China talks, analysts suggest that a further 90-day extension of the existing tariff and export control moratorium is the most likely outcome.

Such an extension would stabilize markets and lay the groundwork for a potential summit between President Trump and Chinese President Xi Jinping, tentatively eyed for late October or early November.

A spokesperson for the U.S. Treasury declined to comment on reports from the South China Morning Post that the two sides are prepared to freeze any new tariffs or other escalation measures for the next 90 days.

Meanwhile, the Trump administration is reportedly preparing a new set of targeted tariffs on critical Chinese sectors, including semiconductors, pharmaceuticals, and industrial equipment such as ship-to-shore cranes. “We’re very close to a deal with China. We’ve essentially made a deal—but let’s see how it unfolds,” President Trump told reporters on Sunday, shortly before finalizing the EU tariff pact with European Commission President Ursula von der Leyen.

Citing current and former officials, the Financial Times reported that the U.S. has temporarily paused certain restrictions on technology exports to China, in an effort to support negotiations and bolster Trump’s pursuit of a meeting with Xi. Reuters could not independently verify this report. Requests for comment from the White House and Commerce Department went unanswered outside business hours.

Broader Issues Remain

While previous rounds of talks in Geneva and London largely focused on scaling back tariffs and unblocking critical exports, deeper structural disputes have yet to be addressed. These include longstanding U.S. complaints about China’s state-led economic model, which Washington claims distorts global markets, and Beijing’s concerns over U.S. national security-based export controls aimed at curbing China’s technological advancement.

“Geneva and London were about restoring a working dialogue—this round is a bridge to actually negotiate the root causes of the tension,” said Scott Kennedy, China economics expert at the Center for Strategic and International Studies in Washington. “An immediate breakthrough is unlikely, but a 90-day ceasefire extension seems the most plausible path.”

U.S. Treasury Secretary Scott Bessent has already signaled openness to such an extension and reiterated the longstanding U.S. demand for China to pivot toward domestic consumption over exports.

Rare Earth Leverage

One of China’s most potent bargaining tools remains its near-monopoly on rare earth minerals, essential to industries ranging from defense to automotive manufacturing. The strategic importance of this leverage continues to influence Washington’s approach to the negotiations.

Trump-Xi Summit on the Horizon?

Speculation is mounting over a potential Trump-Xi summit later this year, with the White House weighing the political and economic stakes of a high-profile visit to China. A renewed trade flare-up could derail those plans.

Sun Chenghao, a fellow at Tsinghua University’s Center for International Security and Strategy, noted that such a summit could offer an opening for the U.S. to reduce its 20% tariffs on Chinese fentanyl-related products. In exchange, China could reaffirm its 2020 pledge to increase imports of U.S. agricultural and industrial goods.

“The prospect of a leaders’ summit gives both sides incentive to demonstrate goodwill and progress,” Sun said.

However, China is expected to seek broader relief—namely, the rollback of U.S. tariffs that cumulatively reach 55% on many Chinese exports and greater flexibility on high-tech exports. Chinese officials argue that such measures would help address America’s record trade deficit with China, which reached $295.5 billion in 2024.

As both sides return to the negotiating table, the stakes remain high—not just for Washington and Beijing, but for the entire global economy.