China, U.S. resume trade talks amid tariff deadline

July 28, 2025(MLN): China and the United States engaged in high-stakes trade negotiations in Stockholm on Monday, marking what experts call the first substantial round of bilateral talks aimed at easing escalating tensions and avoiding the re-imposition of steep tariffs.

The talks are led by U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, and come just weeks before the critical August 12 deadline, by which both nations must finalize a durable trade agreement or face a snapback of tariffs that could exceed 100%.

The meeting also follows a significant development in Scotland, where European Commission President Ursula von der Leyen reached a separate deal with former U.S. President Donald Trump to apply a 15% baseline tariff on most EU goods.

While no major breakthrough is expected in Stockholm, analysts suggest the session could prevent a deeper escalation and pave the way for a possible meeting between Trump and Chinese President Xi Jinping later this year.

Previous discussions in Geneva and London earlier in May and June focused on de-escalating punitive tariffs, reinstating the trade of restricted goods such as rare earth minerals and Nvidia’s H20 AI chips, and navigating export restrictions from both sides.

The latest round has brought renewed attention to Washington’s grievances over China’s state-directed industrial policies, which the U.S. argues distort global markets with low-cost exports.

In contrast, Beijing has pushed back against what it calls excessive U.S. national security export controls, accusing them of targeting its technological rise, as CNBC reported.

Complicating the talks is China’s dominance in the rare earth minerals sector, crucial to global manufacturing and defense supply chains, which has given Beijing a powerful lever in trade negotiations.

Meanwhile, Trump’s administration has already struck deals with Japan, Vietnam, and the Philippines that accepted higher U.S. tariffs ranging from 15% to 20%.

Despite those successes, U.S.-China trade negotiations remain far more intricate.

China currently faces a web of layered U.S. tariffs, including 20% duties linked to the fentanyl crisis, a 10% reciprocal rate, and a separate 25% levy on most industrial goods stemming from Trump’s first term.

Bessent has expressed hope to extend the looming August deadline to prevent tariffs from surging back to 145% for U.S. goods and 125% on Chinese exports.

On its part, China is likely to seek tariff relief and an easing of U.S. high-tech export restrictions, moves it argues would help reduce the $295.5 billion U.S. trade deficit.

The U.S. has also emphasized its long-standing demand for China to shift its economic model away from export reliance and toward domestic consumption.

That rebalancing, officials say, would require Beijing to resolve its ongoing property crisis and strengthen social safety programs to boost consumer confidence.

Wendy Cutler of the Asia Society Policy Institute called the Stockholm talks a potential starting point for a high-profile Trump visit to China in October.

Meanwhile, former U.S. trade representative Michael Froman noted that reorienting China’s economic strategy has been a persistent U.S. objective for over two decades.

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