China, US extend tariff pause after Stockholm trade dialogue concludes

Business Standard

2 days ago

China and the United States have agreed to maintain their current tariffs on each other, according to a report by The Associated Press. The announcement came after a two-day meeting between Chinese and American representatives in Stockholm.
Speaking to reporters, Chinese Vice Minister of Commerce Li Chenggang said both sides held "constructive and candid discussions" and agreed to keep tariffs at their existing rates -- 30 per cent on Chinese goods entering the US, and 10 per cent on US products going into China.
Ongoing dialogue on trade issues
Li added that both countries had "comprehensive and in-depth discussions on microeconomic issues" and had decided to stay in regular contact to discuss trade and economic matters.
Officials from both nations met in Sweden on Monday and Tuesday in a fresh attempt to resolve the ongoing trade dispute that has impacted economic ties between the world's two largest economies. US Treasury Secretary Scott Bessent is expected to address the media later on Tuesday.
Intensive closed-door talks
The first day of talks lasted almost five hours behind closed doors at the Swedish prime minister's office. Ahead of Tuesday's session, Swedish Prime Minister Ulf Kristersson hosted a breakfast meeting with Bessent and US Trade Representative Jamieson Greer.
Since President Donald Trump first introduced tariffs against multiple countries in April under what he called 'Liberation Day' measures, the US has negotiated separate deals with partners such as the UK, Japan and the EU. China, however, remains a major unresolved case.
US sees constructive engagement
Jamieson Greer expressed cautious optimism in comments posted to social media late on Monday (July 28). 'The Chinese have been very pragmatic," he said. "Obviously we've had a lot of tensions over the years. We have tensions now, but the fact that we are regularly meeting with them to address these issues gives us a good footing for these negotiations."
He added, "Whether there will be a deal or not, I can't say. Whether there's room for an extension, I can't say at this point. But the conversations are constructive and they're going in the right direction.'
Tariff pause likely to be extended
Analysts expect that, at the very least, the Stockholm talks will result in an extension of the current tariff pause. These rates are significantly lower than the much higher levels reached in April, which had temporarily unsettled global markets.
In May, both countries agreed to a 90-day pause in Geneva, preventing a further escalation. That pause is due to expire on August 12. For now, the tariffs remain at 30 per cent on Chinese exports to the US and 10 per cent on US exports to China.
Other key topics under discussion
Aside from tariffs, the discussions also covered a range of sensitive topics: American companies' access to China's market, Chinese investments in the US, the flow of fentanyl ingredients from China to the US, China's oil trade with Russia and Iran, and US restrictions on exporting advanced technology like AI chips.
These meetings in Stockholm are also expected to shape whether a possible summit between Trump and Chinese President Xi Jinping will take place later this year, a move that some believe would be necessary to finalise any broad agreements.
On Monday night, Trump said on his Truth Social platform that he was not actively seeking a meeting with Xi. However, he noted that he might visit China if invited. 'Otherwise, no interest!' he wrote.
Focus on long-term economic balance
While China has not revealed many details about its goals in Stockholm, Bessent has hinted that the current stability could pave the way for a longer-term economic balance between the two nations.
Since China's entry into the global trading system nearly 20 years ago, the US has pushed for more domestic consumption within China and better access for foreign products, including American goods.
Beijing a tougher negotiator
Wendy Cutler, a former US trade negotiator and now vice president at the Asia Society Policy Institute, said the Trump administration will find China a more confident and assertive counterpart this time around.
'Rollover of tariff rates should be the easy part,' she said, adding that China has 'learned lessons since the first Trump administration and will not buy into a one-sided deal this time around.' As the talks took place, police set up a security zone along Stockholm's waterfront, attracting attention from tourists and locals hoping to catch a glimpse of the high-level delegates.