US, China Launch New Talks to Extend Tariff Truce

Senior economic officials from the United States and China resumed talks in Stockholm on Monday in an attempt to overcome long-standing economic disputes at the heart of the trade war between the world’s two largest economies. They will seek to extend a three-month trade truce that halted the implementation of high tariffs.

According to Reuters, China faces an August 12 deadline to reach a permanent tariff agreement with the Trump administration, after the two countries reached preliminary agreements in May and June to end their tit-for-tat tariffs and halt exports of rare earth minerals in a weeks-long escalation.

Without an agreement, global supply chains could face renewed disruptions as US tariffs return to double-digit levels, potentially leading to a ban on bilateral trade. The Stockholm talks come on the heels of Trump’s largest trade deal yet, which he struck with the European Union on Sunday. This agreement imposes 15 percent tariffs on most of the bloc’s goods exports to the United States, including cars. The European bloc will also purchase $750 billion worth of American energy and invest $600 billion in the United States in the coming years.

A similar breakthrough is not expected in the talks between the United States and China, but trade analysts said another 90-day extension of the truce on tariffs and export controls reached in mid-May was likely.

This extension would prevent further escalation and facilitate planning for a potential meeting between Trump and his Chinese counterpart, Xi Jinping, in late October or early November.

A US Treasury spokesperson declined to comment on a report in the South China Morning Post, which cited unnamed sources as saying that the two sides would refrain from imposing new tariffs or taking any other steps that could escalate the trade war for another 90 days. The Trump administration is preparing to impose new tariffs on specific sectors that will impact China within weeks, including tariffs on semiconductors, pharmaceuticals, container cranes, and other products.