US-China Trade Talks Resume in Stockholm: Tariff Truce Extension Likely

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Top economic officials from the United States and China will reconvene in Stockholm on Monday to extend a fragile tariff truce, with a critical August 12 deadline looming. The talks aim to delay a potential escalation of U.S. tariffs that could climb to triple-digit levels, threatening global supply chains. Analysts anticipate a 90-day extension of the current ceasefire rather than a resolution of deep-seated economic disputes. This follows a significant U.S.-EU trade deal announced Sunday, where the European Union agreed to a 15% tariff on most exports to the U.S., alongside $750 billion in energy purchases and $600 billion in investments. No comparable agreement is expected with China.

President Donald Trump, speaking Sunday before the EU deal was finalized, expressed cautious optimism about progress with China. “We’re very close to a deal with China. We really sort of made a deal with China, but we’ll see how that goes,” he said. A report from the South China Morning Post suggests both sides may agree to postpone new tariffs or export restrictions for another three months. The U.S. Treasury Department declined to comment on the negotiations. Separately, the Financial Times noted that Washington has temporarily halted new tech export restrictions to avoid derailing the talks, though this remains unconfirmed by other sources.

Previous rounds of discussions in Geneva and London centered on reversing retaliatory tariffs and restoring trade in critical goods like rare earth minerals and AI chips. However, fundamental issues with China’s export-driven economic model and U.S. restrictions on technology transfers continue to stall progress. “I’d be surprised if there is an early harvest on some of these things, but an extension of the ceasefire for another 90 days seems to be the most likely outcome,” said Scott Kennedy of the Center for Strategic and International Studies, in an interview with Reuters.

Speculation is also mounting about a potential late-October summit between President Trump and Chinese President Xi Jinping. Sun Chenghao, a scholar at Tsinghua University, emphasized the value of such a meeting. “The prospect of the heads of state summit is very beneficial to the negotiations because everyone wants to reach an agreement or pave the way in advance,” Sun told the South China Morning Post.

Beijing is likely to press for relief from U.S. tariffs and tech export controls, arguing that meeting past U.S. purchase commitments could help narrow the $295.5 billion trade deficit recorded in 2024. While both sides have incentives to avoid a trade war, entrenched differences make a comprehensive deal unlikely in the near term. The Stockholm talks will test whether a temporary truce can hold amid mounting economic and geopolitical tensions.