U.S. and China Make Progress in Trade Talks, but Tariff Truce Extension Still Unconfirmed

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U.S. and Chinese officials held two days of trade talks in Stockholm, aiming to extend a temporary tariff pause due to expire on August 12. Both sides described the talks as constructive and voiced support for a 90-day extension, but no formal agreement has been announced. Final approval now rests with President Donald Trump.

The talks were led by U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng. Topics included more than just tariff rates; negotiators also addressed technology export restrictions, China’s oil purchases from sanctioned nations, rare earth supply concerns, and efforts to curb industrial overcapacity.

Under the current arrangement, the U.S. applies tariffs of around 30% on Chinese goods, while China maintains duties near 10% on U.S. exports. If no extension is reached, tariffs could revert to higher pre-truce levels, with some rates possibly reaching up to 145%, raising concern among businesses and markets.

Following the talks, markets showed cautious optimism. Stock indexes in Asia made slight gains, though investors remain wary. The International Monetary Fund warned that extended U.S.-China trade tensions could hinder global growth, even as it raised its 2025 forecast slightly.

Some observers believe the Stockholm meetings could lay the groundwork for a potential summit between President Trump and President Xi Jinping later this year. However, neither side has confirmed plans for such a meeting.

Analysts say that even without a finalized deal, the talks helped ease immediate fears of a trade breakdown. Officials on both sides emphasized the importance of avoiding further disruption to global supply chains and maintaining current tariff levels to stabilize markets.

The next steps depend heavily on whether President Trump approves the proposed extension. With the August deadline approaching, the outcome of these negotiations could have major implications for businesses, trade policy, and broader U.S.-China relations in the months ahead.