Swedish capital prepares for US-China trade talks

STOCKHOLM: Top U.S. and Chinese economic officials will resume talks in Stockholm on Monday (28 July) to try to tackle longstanding economic disputes at the centre of a trade war between the world's top two economies, aiming to extend a truce by three months and keeping sharply higher tariffs at bay.

AI Brief

US and China resume trade negotiations to prevent triple-digit tariffs and further disruption to global supply chains.
An August 12 deadline looms, with analysts expecting a 90-day truce extension to avoid escalation and enable future diplomacy.
Unlike the recent EU deal, US-China talks are unlikely to yield a major agreement but aim to maintain stability.

The negotiations will begin on Monday afternoon local time at Rosenbad, the Swedish prime minister's office in central Stockholm, a source familiar with the planning of the talks said. Chinese and U.S. national flags were being raised at the building on Monday morning.

China is facing an August 12 deadline to reach a durable tariff agreement with President Donald Trump's administration, after Beijing and Washington reached preliminary deals in May and June to end weeks of escalating tit-for-tat tariffs and a cut-off of rare earth minerals.

Without an agreement, global supply chains could face renewed turmoil from U.S. duties snapping back to triple-digit levels that would amount to a bilateral trade embargo.

The Stockholm talks come hot on the heels of Trump's biggest trade deal yet with the European Union on Sunday for a 15% tariff on most EU goods exports to the U.S., including autos.

No similar breakthrough is expected in the U.S.-China talks but trade analysts said that another 90-day extension of a tariff and export control truce struck in mid-May was likely.

An extension of that length would prevent further escalation and facilitate planning for a potential meeting between Trump and Chinese President Xi Jinping in late October or early November.

A U.S. Treasury spokesperson declined comment on a South China Morning Post report quoting unnamed sources as saying the two sides would refrain from introducing new tariffs or other steps that could escalate the trade war for another 90 days.