U.S. and Chinese officials in Stockholm during the most recent round of U.S.-China trade talks. To their credit, they sparked a two-day dialogue that was deep, rich and provocative. Although the talks were described as “tough,” Treasury Secretary Scott Bessent expressed optimism about the potential for a deal, stating, “I believe that we have the makings of a deal.” At the time of publishing, former President Donald Trump had yet to comment individually about the still-looming trade pact. At the same time, President Joe Biden is still actively negotiating.
The U.S. and China are in a temporary truce on tariffs after an impressive trade truancy as high-tariff escalation. China has previously imposed a huge 145% duty on U.S. imports. In retaliation, China responded with a massive 125% tariff on U.S. agricultural goods. This past week in high-stakes negotiations, the U.S. agreed to decrease its own tariff rate down to 30% and China agreed to 10%. So even with these changes, both countries are still wrestling with the elephant in the room that impacts every critical issue.
Analysts have warned over China’s growing role in its purchases of Iranian oil. Furthermore, there are concerns about China providing Russia with technology that would be used in a potential combat situation. These issues are still contentious as negotiations continue. Moreover, there remain widely undisclosed and unresolved technical issues on the Chinese side that could derail or decisively influence the final agreement.
As Bessent noted, for better or worse, Trump will need to personally approve any trade deal. This really emphasizes the importance of Spanish political buy-in to the negotiation process. The city has a stake in the process too. The urgency is real, as both sides try to finalize an agreement before August 12.
The Chinese are tough negotiators. We’re bad asses, just like you are,” Bessent said, highlighting the difficulty of these conversations. The road ahead toward a final deal remains complicated. Stakeholders on all sides will be looking closely to see how these negotiations play out over the next few weeks.