US, China hold high-level economic talks in Stockholm to extend trade truce

Senior economic officials from the US and China met in Stockholm on Monday for over five hours of talks, aiming to resolve long-standing economic disputes at the heart of the trade war between the world’s two largest economies and to extend a ceasefire by three months.

US Treasury Secretary Scott Bessent was part of the US negotiating team that arrived at Rosenbad, the Swedish Prime Minister’s office in central Stockholm, in the early afternoon. Chinese Vice Premier He Lifeng was also seen at the meeting location in video footage.

China is approaching an August 12 deadline to reach a permanent tariff agreement with the Donald Trump administration. Beijing and Washington had reached preliminary agreements in May and June to end weeks of retaliatory tariffs and the disruption of rare earth mineral supplies.

Negotiators from both sides were seen leaving the office around 8:00 PM (18:00 GMT) and did not speak to reporters. The talks are expected to resume on Tuesday.

Trump commented on the talks during a wide-ranging press conference in Scotland with UK Prime Minister Keir Starmer.

“I would very much like China to open up its country,” Trump said.

If an agreement is not reached, global supply chains could be thrown into turmoil again as the US might take a step toward a bilateral trade embargo by raising tariffs to triple-digit figures.

US Trade Representative Jamieson Greer, who participated in the Stockholm talks, said he did not expect “major progress today.”

“What I expect is that we will continue to monitor and check the implementation of our agreement to date, ensure that the flow of critical minerals between the parties is secured, and lay the groundwork for developing and balancing trade moving forward,” he told CNBC.

The talks in Stockholm follow Trump’s signing of the “biggest trade deal” ever with the European Union on Sunday, which imposes a 15% tariff on most EU goods exported to the US.

Trump-Xi meeting

Trade analysts have said that a 90-day extension of the tariff and export control ceasefire reached between China and the US in mid-May is likely.

The extension would facilitate the planning of a possible meeting between Trump and Chinese President Xi Jinping in late October or early November.

The Financial Times reported on Monday that the US has suspended its restrictions on technology exports to China to avoid disrupting trade talks with Beijing and to support Trump’s efforts to hold a meeting with Xi this year.

Meanwhile, in Washington, US senators from both major parties plan to introduce bills this week targeting China’s Taiwan policy and emphasizing security and human rights. These bills could complicate the talks in Stockholm.

Taiwanese leader Lai Ching-te decided to postpone an August trip, during which he would have also stopped in the US, after his team communicated with the Trump administration.

This trip could have provoked a reaction from Beijing and derailed the trade talks.

A long and complex process

Previous US-China trade talks in Geneva and London in May and June focused on lowering retaliatory tariffs that had reached triple-digit figures for both the US and China, and restarting the flow of goods halted by the US, such as Nvidia’s H20 AI chips and other products.

So far, the talks have not delved into broader economic issues.

“The Geneva and London talks were steps to get the relationship back on track so that, at some point, negotiations could be held on the issues that form the basis of the dispute between the two countries,” said Scott Kennedy, a China economy expert at the Center for Strategic and International Studies in Washington.

Analysts note that US-China negotiations are much more complex than those with other Asian countries and will require more time. China’s dominance in the global market for rare earth minerals and magnets, used in everything from military hardware to car wiper motors, has proven to be an effective leverage tool over US industries.