On Tuesday, senior officials from China and the United States agreed to continue discussions on extending a fragile trade truce set to expire in mid-August, but have yet to reach an agreement to prevent a potentially damaging trade war between the world's two largest economies.
The announcement followed two days of intensive negotiations in Stockholm. These were the third round of formal talks between the two countries since President Trump raised tariffs on Chinese goods to triple digits this year, prompting Beijing to retaliate strongly, bringing most trade between the two countries to a standstill.
U.S. Treasury Secretary Scott Bessant co-chaired the U.S. side of the negotiations with Trade Representative Jamison Greer. Bessant described the talks as "constructive" but stressed that the ultimate decision on extending the tariff suspension rests with President Trump.
"The deal is not final until President Trump confirms it," Bessant said on Tuesday. He also indicated that if Trump approves the suspension of tariffs on China, it would likely remain for 90 days.
Trump told reporters aboard Air Force One on Tuesday that he would discuss the situation with senior advisers on Wednesday and "either approve it or not." He seemed to hint at some unspecified snag in the China-U.S. negotiations. "I was like, 'Here we go again,'" Trump said, before adding, "But it was resolved today."
The news of the Stockholm talks caused some volatility in the stock market, with investors expressing concern about a renewed escalation of trade tensions between the U.S. and China.
Previous rounds of negotiations resulted in a temporary ceasefire in the trade war. China eased its rare earth export restrictions, while the Trump administration lifted restrictions on U.S. exports of products and technology and a proposed visa ban. The U.S. reduced tariffs on Chinese imports from 145% to 30%, while China reimposed a 10% tariff on U.S. goods.
China and the EU met for over five hours on Monday at the Swedish Prime Minister's office in central Stockholm. The two sides met again for about five hours on Tuesday, with a working lunch of salads. Chinese Vice Premier He Lifeng attended the talks as the Chinese representative.
China's chief trade negotiator, Li Chenggang, also spoke positively of the constructive nature of the talks. Afterward, he told reporters in Stockholm that both sides recognized the importance of maintaining a stable trade relationship.
"The Chinese and US economic and trade teams will maintain close communication, exchange views on trade issues in a timely manner, and continue to promote the stable and healthy development of bilateral trade relations," Li said.
The negotiations come as the global economy enters a critical week. The Trump administration is trying to meet a Friday deadline to extract concessions from dozens of countries to reimpose tariffs announced in April, which were suspended and, in some cases, adjusted, in an effort to buy time and exert pressure for a trade deal.
The Trump administration recently announced preliminary trade deals with several major US trading partners, including the European Union and Japan. Under the agreements, most goods imported into the US from these countries will be subject to a 15% tariff, particularly on autos. At the same time, these countries have pledged hundreds of billions of dollars in investments in the United States.
However, the greatest uncertainty in Trump's chaotic trade policies remains China, one of the largest sources of US imports. After several rounds of tariff increases and countermeasures, both sides signaled a de-escalation of trade frictions following talks in Geneva in May and London in June.
Trade tensions between China and the United States escalated sharply in early April after Trump announced sweeping tariff increases. China, the only country to immediately retaliate, reciprocated the threatened tariffs. Beijing also restricted exports of seven rare earth elements—strategic resources almost entirely processed and refined in China and widely used in electric vehicles, smart weapons, and other high-tech equipment.
Trump subsequently responded by gradually increasing tariffs on Chinese products until both countries agreed to suspend the measures.
When asked to list the concessions the United States had secured from China, Greer cited China's decision to grant rare earth export licenses to American companies.
"They had previously blocked all rare earth magnets, and now they've restored the supply," Greer said.
Greer also said that if the truce is not extended by August 12, tariffs on some Chinese imports could rise back to over 80%. However, Bessant downplayed this possibility.
The Trump administration has been pressing China to curb the flow of fentanyl into the United States and has expressed concern about China's purchases of Russian and Iranian oil and recent exit bans that have prevented some American citizens from leaving China.
U.S. officials appear optimistic about more ambitious trade negotiations in the coming months, including a possible meeting between Trump and Chinese leader Xi Jinping this year. But late Monday, Trump disputed reports that he was eager to meet with the Chinese leader, noting that it was Xi who invited him.
"I may go to China, but only at the invitation of President Xi, which has already been extended," Trump said in a message posted on his social media platforms.
U.S. government officials have discussed the possibility of Trump visiting Beijing before the Asia-Pacific Conference in South Korea in October, or arranging a meeting between the president and Xi on the sidelines of another international conference.
