The United States and China wrapped up their newest round of trade talks in Stockholm with little to show in the way of breakthroughs. This meeting was the third round of talks between the two countries since April. Significantly, it comes just weeks before the truce, which was brokered in May, is due to run out on August 12. US Treasury Secretary Scott Bessent recently said that the fate of the trade truce now rests completely on President Donald Trump. Any possible extension will depend on his actions.
Both parties described the negotiations as “constructive.” Their focus was on a wide range of economic grievances, but especially the enforcement of long overdue terms reached between President Trump and Chinese President Xi Jinping. In addition, the talks touched upon sensitive topics such as China’s dealings with Russia and Iran, as well as the US’s ongoing concerns regarding China’s trade practices, particularly in relation to the technology sector.
In fact, President Trump has long been fixated on the trade deficit, especially one with China. Last year, that deficit reached a record $295 billion, meaning that the US imported much more in goods from China than it sold there. To address this imbalance, Trump moved swiftly upon taking office to implement a series of tariff increases on Chinese imports. This action sparked tit-for-tat tariffs from Beijing. Tensions reached a high crescendo before a short-lived détente was brokered in May, sending tariff rates beyond the triple-digit percentages.
USTR Greer, who leads the US negotiations, trumpeted that the US is on track to increase this positive trade balance with China by $50 billion over last year during these recent negotiations. This demonstrates the administration’s firm commitment to address the chronic trade deficit.
Bessent touted the progress achieved during the negotiations, but like his talk counterparts, stressed that no deal was done until Trump blessed it.
“Nothing is agreed until we speak with President Trump,” – Scott Bessent
He further observed the positive spirit of the discussions, saying,
“Just to tamp down that rhetoric, the meetings were very constructive. We just haven’t given the sign off.” – Scott Bessent
In addition, as Bessent pointed out, it is important to lower the dangers from concentrated strategic industries like rare earths and semiconductors.
“We just need to de-risk with certain strategic industries, whether it’s the rare earths, semiconductors, medicines,” – Scott Bessent
From Beijing, China’s chief trade negotiator, Li Chenggang, had pledged both countries to honour the terms of their existing agreement. He stressed their deep appreciation and interest in their shared pursuit to keep the conversation going.