In a little-noticed change to U.S.-China trade war, President Donald Trump just gave Beijing the green light to continue purchasing Iranian oil. The choice has raised the ire of U.S. leaders on both sides. That approval comes at a time when negotiations are ongoing. These negotiations are seen primarily as efforts to extend a tariff pause set to expire on August 12. The success or failure of these negotiations will have a profound effect on both countries’ economies. That’ll be especially true if Trump again fails to endorse the current truce.
Scott Bessent, one of the principal US negotiators, expressed guarded enthusiasm for this week’s discussions. These dialogues happened in Stockholm, Sweden. This meeting was the third high-level UN discussion on the issue since May. At the time, the U.S. and China reached a truce on most tariffs after their first talks in Geneva, Switzerland. Bessent’s ebullient appraisal suggests an auspicious sign of progress in the tangled discourse that marks relations between the two countries.
China’s chief trade negotiator raised the stakes during the talks by pushing hard for an extension of the tariff truce. Any possible extension is contingent on Trump’s blessing — that was the unequivocal message delivered by U.S. Trade Representative Jamieson Greer. He noted, “We’re going to head back to Washington, D.C. We’re going to talk to the president about whether that’s something that he wants to do.” This makes evident just how important the role of Trump himself is to the overall picture of trade policy.
What makes the terms even more complicated is the specter of even higher tariffs if no deal is found. If the tariff pause is not extended, U.S. tariffs on Chinese imports will revert to their levels of late April. This move would ratchet up ongoing trade tensions between the two countries. In concrete terms, Trump has announced plans to slap a 34% general tariff on Chinese goods. This action fits into a much larger global tariff strategy that he wants to follow.
After talks with Bessent Trump would comment on the upbeat, positive key of the negotiations. He stated, “I just had a phone call from Scott Bessent. They had a very good meeting with China, and it seems that they’re going to brief me tomorrow. We’ll either approve it or not. He felt very good about the meeting, better than he felt yesterday.”
U.S. and Chinese trade delegations to begin negotiations within 90 days. These discussions demonstrate their willingness to address the challenges presented by today’s economic realities. The deadline for the current tariff pause is looming dangerously close. We all now have Trump on the edge of our seats, awaiting his decisive actions to chart the course of future U.S.-China trade relations.