Negotiators from the United States and China held crucial trade discussions in Stockholm on Monday, attempting to resolve ongoing economic tensions that have affected both nations and the global market for several years. This meeting took place just days before an important deadline set for August 12, by which time a long-term trade agreement must be finalized to avoid the imposition of new and significantly higher tariffs on a wide range of goods. If this deadline passes without a conclusive agreement, both countries are expected to apply steep retaliatory tariffs—reportedly exceeding 100%—which could potentially cause major disruptions across international trade systems, supply chains, and economies.
The trade negotiations were spearheaded by two high-level representatives: United States Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng. These talks follow previous efforts to ease tensions, including a temporary truce that was agreed upon in May and a tentative draft agreement developed in June. Though those earlier developments brought some optimism, no final resolution has yet been achieved. Meanwhile, President Donald Trump recently reached a successful trade agreement with the European Union during a visit to Scotland. Under that deal, the EU accepted a 15% tariff on its exports to the US and agreed to invest $600 billion in American sectors, including large purchases of energy and military equipment. However, in contrast, similar progress with China appears more elusive.
Despite this, there remains cautious optimism that the existing truce between the US and China could be extended for another 90 days. This possible extension would provide negotiators with more time to finalize a broader and more permanent agreement. According to analysts and media reports, both governments are seriously considering this option to prevent economic instability. Such an extension could also create an opportunity for a face-to-face meeting between President Trump and Chinese President Xi Jinping, possibly later this year, which would mark a significant step forward in restoring stability to trade relations between the two economic giants.
At the heart of the disagreements are long-standing economic grievances and structural disputes. The United States has been consistently critical of China’s state-sponsored economic practices, which it claims result in the mass production and export of artificially low-priced goods, thereby distorting international markets and harming domestic industries in other countries. On the other hand, China believes that the United States is unfairly using export restrictions and trade policies to block its progress in the tech industry, especially by limiting access to key US-made technologies such as AI chips and advanced hardware. These deeper systemic issues remain unresolved and continue to hinder the possibility of a fully comprehensive trade agreement.
President Trump recently hinted that a deal with China might be near, but remained vague, saying the countries were “very close” to something significant. Meanwhile, US negotiator Bessent emphasized his interest in extending the current truce beyond the August 12 deadline, noting that if no action is taken, tariffs could rise drastically to 145%, placing a heavy burden on both nations’ economies. On its part, China is expected to push for lower tariffs—it currently faces average tariffs of 55%—as well as reduced restrictions on importing American high-tech products. Beijing believes that increasing its imports from the US would help close the massive trade deficit, which hit $295.5 billion in the year 2024. Both countries remain under pressure to find common ground, as failure to do so could trigger a new wave of economic uncertainty worldwide.
