Here at home, the United States and China are set to begin a new round of negotiations this coming Monday. Optimism is rising as both sides attempt to further extend their trade war truce. The truce began 90 days ago and is scheduled to expire on August 12. According to insiders, there’s a high chance that either country could yield to an agreement on a three-month extension.
The next round of negotiations is set to take place in Sweden. Treasury Secretary Scott Bessent will head the US delegation, with Vice Premier He Lifeng as head of the Chinese delegation. Bessent painted an optimistic picture going into the negotiations, particularly in terms of upcoming talks with China, which she described as “in a very good place.” This overwhelming optimistic mood highlights a shared eagerness to compromise and seek solutions in the face of expanding trade hostility.
Yet the US-China trade relationship continues to be characterized by high tariffs on several key imports and exports. Both countries have instituted punishing import duties over 100% on a wide range of products. The US has thus far pursued these aggressive negotiations with the likes of the European Union, Japan, the United Kingdom, Indonesia and Vietnam. Together, these recent efforts have the potential to create a collaborative and positive environment with China.
On their side, earlier this year, senior officials from both countries met in Geneva. They further deadlocked during meetings in London as they continued to lay ground for possible settlements. The US has made strides in its trade relations with other economies, culminating in President Donald Trump’s announcement of a framework tariffs deal with the European Union. The signing of this agreement was a significant development, as it ended a months-long standoff between the world’s top two economic powers.
Additionally, Trump recently touted a “massive” trade deal with Tokyo, indicating a broader strategy to stabilize and strengthen trade relations on multiple fronts. Taken together, these developments indicate that the US is trying to establish a better negotiating posture towards China.
Analysts are already preparing as the new round of negotiations draws near. They’re looking for any indication that the US and China are feeling their way towards a second truce. A successful extension of their existing bilateral agreement could point to a new positive direction for the troubled US-China bilateral relationship. More importantly, it can set the ground for deeper negotiations to come.