U.S. Treasury Secretary Scott Bessent and China’s Vice Premier He Lifeng led a third round of high-level trade negotiations in Stockholm on July 28–29, aiming to extend a fragile trade truce before it lapses on August 12. Without an extension, punitive tariffs that once soared above 100 percent could return, threatening global supply chains and commerce.
This meeting follows prior discussions in Geneva and London since mid-May, during which both sides agreed to ease deeply damaging retaliatory tariffs. U.S. tariffs previously peaked at 145 percent on Chinese goods and 125 percent vice versa. The Stockholm talks are intended to solidify an additional 90-day extension of the tariff pause while exploring broader economic concerns.
Negotiations center on prolonging the existing detente through mid-November, preserving trade flows and avoiding the reinstatement of crippling rates. The U.S. continues to press China on issues like state support for manufacturing and export surpluses. Chinese officials insist their economic competitiveness stems from innovation rather than unfair subsidies.
There has also been movement on critical materials and export policy. Beijing recently lifted its export ban on rare-earth metals and magnets to the U.S., while Washington eased restrictions on semiconductor design software and materials, as well as aircraft engine exports. Additionally, the U.S. delegation is expected to raise concerns over China’s continued importation of oil from Russia and Iran. These transactions remain under scrutiny in Washington, where bipartisan pressure has mounted to impose 100 percent tariffs on such imports.
As a sign of goodwill, China recently suspended an antitrust investigation into DuPont China, a subsidiary of the U.S. firm DuPont. This follows earlier tensions where the company had been targeted in what many viewed as retaliatory regulatory action. Chinese Commerce Minister Wang Wentao emphasized Beijing’s preference to stabilize trade ties and avoid a tariff war, noting progress from recent European negotiations.
Treasury Secretary Bessent described the current state of U.S.–China trade relations as being “in a very good place,” and voiced confidence that an agreement to extend the tariff pause would be reached in Stockholm.
Investor sentiment responded positively to signs of progress. Oil prices rose slightly on optimism that a continued truce would support stable global demand. U.S. stock futures and European equities also advanced, buoyed by a separate U.S.–EU trade accord announced concurrently. Markets interpreted these developments as signs that the risk of a full-blown trade war may be receding, at least in the short term.
Despite these encouraging signals, analysts remain cautious. The Stockholm talks are unlikely to resolve deep-rooted structural disagreements over industrial policy, technology transfer, and market access. However, they could lay the groundwork for more substantive engagement later this year, potentially culminating in a summit meeting between President Donald Trump and Chinese President Xi Jinping.
In the short term, negotiators are expected to secure a 90-day extension, staving off tariff reversion through November. If successful, this move will provide breathing room for more in-depth discussions on semiconductors, rare earths, and broader industrial reform.
The Stockholm round underscores the ongoing challenges of U.S.–China trade diplomacy. Progress has been modest and tactical rather than transformational, but it may prove crucial in preventing a costly breakdown in commercial ties between the world’s two largest economies.
