US And China Reopen Trade Negotiations In Stockholm

American and Chinese delegates continued their second day of trade discussions in Stockholm on Tuesday, aiming to ease years-long economic friction and prevent further escalation in the tariff dispute between the two economic giants.

Although a major breakthrough isn’t expected immediately, insiders suggest that both nations may agree to another 90-day pause on implementing new tariffs, a continuation of the temporary relief granted in mid-May. These discussions could also set the stage for a possible high-level meeting between U.S. President Donald Trump and Chinese President Xi Jinping later in the year, although Trump publicly dismissed any active pursuit of such a meeting.

Talks kicked off on Monday at Rosenbad, the official premises of Sweden’s prime minister. The discussions reportedly stretched over five hours, but both teams remained silent afterward. On Tuesday morning, U.S. Treasury Secretary Scott Bessent was spotted returning to the venue following a separate engagement with Sweden’s prime minister. China’s Vice Premier He Lifeng was also seen entering the meeting space.

Beijing has until August 12 to finalize a long-term solution on tariffs with the current U.S. administration. This follows tentative compromises reached in May and June, aimed at easing the tit-for-tat tariff battle and the suspension of rare earth mineral exports.

Failure to strike a deal could destabilize international trade once again, with dormant tariffs set to snap back into place, reaching extreme levels that many experts say could effectively freeze bilateral commerce.

These talks come just after the U.S. finalized a major trade agreement with the European Union, instituting a 15% tariff on most EU exports to the U.S., as well as concluding a separate deal with Japan. While the EU deal brought short-term relief, it sparked backlash in parts of Europe. France criticized the agreement as a “submission,” and Germany warned of potentially severe economic consequences.

Analysts note that China holds considerable strategic power in the global supply of rare earths and specialized magnets essential for industries ranging from defense systems to basic vehicle parts. In contrast to the EU, China doesn’t depend on the U.S. for defense alliances, allowing it more flexibility in how it approaches prolonged negotiations.

“China is well aware of its strong negotiating position, as could clearly be seen in the temporary escalation observed in April,” one economist explained.

“But over Europe always hangs the Damocles sword of the U.S. withdrawing its security guarantee, and that is why the EU did not escalate the situation like China did.”

Reports emerged suggesting that the U.S. has temporarily relaxed restrictions on exporting certain technologies to China in an effort to keep the negotiation environment stable and possibly facilitate a future meeting between both presidents.

Trump, however, refuted any intention to initiate such a meeting. “This is not correct, I am not SEEKING anything! I may go to China, but it would only be at the invitation of President Xi, which has been extended. Otherwise, no interest!” he wrote on Truth Social on Tuesday.

Earlier rounds of negotiations held in Geneva and London during May and June had concentrated on reducing harsh retaliatory tariffs and restoring trade flow in key sectors particularly rare earth exports from China and certain high-end tech goods restricted by the U.S.

The broader issues remain unchanged: Washington continues to object to what it sees as China’s state-supported export-heavy economic model, which it argues distorts global trade. Beijing, on the other hand, accuses the U.S. of weaponizing national security concerns to block technological growth in China.

Bessent has previously signaled interest in another extension of the truce and reiterated the U.S. goal of urging China to focus more on boosting domestic consumption rather than relying on exports, an objective American leaders have long advocated for.