In a significant diplomatic meeting in Stockholm, the US and China have agreed to extend their trade war truce by 90 days. The focus will shift to issues like drug control, electric vehicles, and Russian oil. This meeting could pave the way for a future summit between Trump and Xi Jinping.
China and the US Meet in Stockholm: Trade War Truce Extended
China and the US Meet in Stockholm: Trade War Truce Extended
On Monday, the US and China are meeting in Stockholm. The countries, embroiled in a heated trade war, have reportedly agreed to extend the tariff pause by 90 days, according to sources from SCMP. Instead, they are expected to focus on issues such as drugs, electric vehicles, and Russian oil.
The trade war between the world's two largest economies has intensified since Donald Trump's return to the White House.
Several times, Trump has strongly criticized China and increased trade tariffs against the country.
A Rapidly Escalating Trade War
In March, Trump accused China of not doing enough to stop the influx of the deadly synthetic drug fentanyl into the US. As punishment, he imposed an additional 20 percent tariff on China.
The conflict quickly escalated into an aggressive trade war. The US raised its tariffs in several rounds, up to 145 percent. China responded with tariffs on American goods, up to 125 percent.
To cool down the conflict, the countries agreed in May to a 90-day tariff pause—until mid-August. During the pause, US tariffs on Chinese goods are at 30 percent, and China's counter-tariffs are at 10 percent.
Sources: Main Issue Put on Hold
During Monday's meeting in Stockholm, the countries are expected to agree on how to proceed once the pause ends. They are represented by China's Vice Premier He Lifeng and US Treasury Secretary Scott Bessent.
Even before the meeting, sources told the South China Morning Post that no sharp proposal on new tariff levels will be made. Instead, the countries have agreed to extend the tariff pause by another 90 days, according to the sources.
The meeting could pave the way for a summit between Trump and Xi Jinping later this fall, says former negotiator Wendy Cutler to AP.
"This meeting will be important to start preparing for a meeting between them in the fall," she says.
China will likely want to go through many details regarding the meeting and the agreements to be presented there.
Strong Economy Gives China Confidence
When He Lifeng and his delegation arrive at the Stockholm meeting, they do so with renewed confidence, writes CNN.
Despite the trade war, China has managed to deliver a period of impressive economic growth and has also strengthened its control over strategically important resources for the future.
According to CNN, China is therefore believed to be willing to press the US more than before, focusing significantly on the removal of fentanyl tariffs against the country.
Several Issues Remain Unresolved
But even though the atmosphere has eased somewhat from the harsh trade war in the spring, many unresolved issues remain in the conflict, writes the channel.
China still buys oil from Russia—despite Trump's previous threats to impose 100 percent tariffs on all countries that do so.
At the same time, China knows it has access to rare earth metals essential to the American tech industry. They also have power over key supply chains for batteries for electric vehicles and drones.