US, China officials to hold trade talks in Stockholm: What to expect?

Indian Express

5 days ago

Senior officials from the United States and China will meet in Stockholm today to discuss trade and economic issues, in what both sides describe as a step toward easing tensions. US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng will be meeting for the third time this year, nearly four months after President Donald Trump proposed sweeping tariffs, including an import tax of up to 145% on Chinese goods.
The meeting is also expected to lay the groundwork for a potential meeting between Trump and Chinese President Xi Jinping later this year.
The planned meeting in the Swedish capital is part of broader efforts by both countries to stabilise a relationship that has been strained by trade disputes, technology competition, and geopolitical rivalry. While officials have kept the agenda under wraps, it is expected, as per AP, that the discussions will cover:
This could be the first real opportunity for the two governments to address structural reform issues including market access in China for US companies, said Sean Stein, president of the US-China Business Council, as per AP.
The US imposed a 20% tariff on fentanyl-related products earlier this year. China responded with a 10% tariff on US goods. In July, China placed two fentanyl precursor chemicals under enhanced control.
Gabriel Wildau, managing director at the consultancy Teneo, said major relief is unlikely. 'It's possible that Trump would cancel the 20% tariff that he has explicitly linked with fentanyl… but I would expect the final tariff level on China to be at least as high as the 15–20% rate contained in the recent deals with Japan, Indonesia, Vietnam.'
A key concern for Washington is China's industrial overcapacity.
'Right now, many companies, especially in manufacturing, feel quite deeply that China's manufacturing capacity is so strong, and the Chinese people are incredibly diligent,' Chinese Premier Li Qiang said on Thursday, as per Bloomberg News. 'Factories run 24 hours a day.'
The US is expected to pressure China on reducing oil purchases from Russia and Iran.
The Stockholm talks will be 'geared towards building a trade agreement based around Chinese purchase commitments and pledges of investment in the US in exchange for partial relief from US tariffs and export controls,' Wildau said, as per AP.
(With inputs from AP)