US-China Trade Talks in Stockholm: Paving the Way for a Tariff Extension

On Tuesday afternoon, negotiations between the USA and China held in Stockholm wrapped up after two days of discussions aimed at extending the 90-day tariff pause that has been in effect since May. This pause is set to expire on August 12. During a press conference, China's Vice Minister of Commerce Li Chenggang announced that both nations are working toward extending the tariff pause, as reported by Reuters. Li noted that the countries had revisited consensus reached in previous discussions in Geneva and London. He emphasized that ongoing communication regarding trade and economy issues will continue. US Trade Representative Jamieson Greer mentioned that an extension of the tariff pause might be considered by President Donald Trump. US Secretary of the Treasury Scott Bessent echoed this sentiment, indicating that any agreement with China would need Trump's approval. However, he also pointed out that certain technicalities still need resolution. The current tariff pause has led to significant tariff reductions: the US decreased tariffs on Chinese imports from a staggering 145% last spring to 30%, while China reduced its tariffs from 125% to 10%. Given the economic climate, the extension of this pause is regarded as a priority before any potential meeting between President Trump and Chinese President Xi Jinping later this year. Although Trump has denied efforts for such a meeting, the ongoing negotiations could create a favorable environment for dialogue. The delegations in Stockholm were led by Treasury Secretary Scott Bessent and China’s Vice Premier He Lifeng. Importantly, Bessent clarified that no discussions regarding a potential leaders' meeting occurred during the Stockholm talks. Additionally, it's noteworthy that on July 27, the USA reached a trade agreement with the EU after prolonged negotiations, resulting in base tariffs of 15% on EU goods entering the US. This development, along with agreements recently concluded with the United Kingdom and Vietnam, reflects the USA's dynamic trade strategy. As these negotiations unfold, all eyes will be on how the decisions made in Stockholm will impact future trade relations between the US and China, and whether the tariff pause will be successfully extended. Related Sources: • Source 1 • Source 2