US, China to launch new talks on tariff truce extension, easing path for Trump-Xi meeting
STOCKHOLM - Top U.S. and Chinese economic officials will resume talks in Stockholm on Monday to try to tackle longstanding economic disputes at the centre of a trade war between the world's top two economies, aiming to extend a truce by three months and keeping sharply higher tariffs at bay.
China is facing an August 12 deadline to reach a durable tariff agreement with President Donald Trump's administration, after Beijing and Washington reached preliminary deals in May and June to end weeks of escalating tit-for-tat tariffs and a cut-off of rare earth minerals.
Without an agreement, global supply chains could face renewed turmoil from U.S. duties snapping back to triple-digit levels that would amount to a bilateral trade embargo.
The Stockholm talks come hot on the heels of Trump's biggest trade deal yet with the European Union on Sunday for a 15% tariff on most EU goods exports to the U.S., including autos. The bloc will also buy $750 billion worth of American energy and make $600 billion worth of U.S. investments in coming years.
No similar breakthrough is expected in the U.S.-China talks but trade analysts said that another 90-day extension of a tariff and export control truce struck in mid-May was likely.
An extension of that length would prevent further escalation and facilitate planning for a potential meeting between Trump and Chinese President Xi Jinping in late October or early November.
A U.S. Treasury spokesperson declined comment on a South China Morning Post report quoting unnamed sources as saying the two sides would refrain from introducing new tariffs or other steps that could escalate the trade war for another 90 days.
Top stories
Swipe. Select. Stay informed.
Singapore Not feasible for S'pore to avoid net‑zero; all options to cut energy emissions on table: Tan See Leng
Singapore With regional interest in nuclear energy rising, S'pore must build capabilities too: Tan See Leng
Singapore New Mandai North Crematorium, ash-scattering garden to open on Aug 15
Singapore Tanjong Katong Road sinkhole did not happen overnight: Experts
Singapore Sewage shaft failure linked to sinkhole; PUB calling safety time-out on similar works islandwide
Singapore Science Journals: Lessons from weird fish sold in Singapore's wet markets
World US and EU clinch deal with broad 15% tariffs on EU goods to avert trade war
Asia Displaced villagers at Thai-Cambodian border hope to go home as leaders set to meet for talks
Trump's administration is poised to impose new sectoral tariffs that will impact China within weeks, including on semiconductors, pharmaceuticals, ship-to-shore cranes and other products.
"We're very close to a deal with China. We really sort of made a deal with China, but we'll see how that goes," Trump told reporters on Sunday before European Commission President Ursula von der Leyen struck their tariff deal.
DEEPER ISSUES
Previous U.S.-China trade talks in Geneva and London in May and June focused on bringing U.S. and Chinese retaliatory tariffs down from triple-digit levels and restoring the flow of rare earth minerals halted by China and Nvidia's H20 AI chips and other goods halted by the United States.
So far, the talks have not delved into broader economic issues. They include U.S. complaints that China's state-led, export-driven model is flooding world markets with cheap goods, and Beijing's complaints that U.S. national security export controls on tech goods seek to stunt Chinese growth.
"Geneva and London were really just about trying to get the relationship back on track so that they could, at some point, actually negotiate about the issues which animate the disagreement between the countries in the first place," said Scott Kennedy, a China economics expert at the Center for Strategic and International Studies in Washington.
"I'd be surprised if there is an early harvest on some of these things but an extension of the ceasefire for another 90 days seems to be the most likely outcome," Kennedy said.
U.S. Treasury Secretary Scott Bessent has already flagged a deadline extension and has said he wants China to rebalance its economy away from exports to more domestic consumption -- a decades-long goal for U.S. policymakers.
Analysts say the U.S.-China negotiations are far more complex than those with other Asian countries and will require more time. China's grip on the global market for rare earth minerals and magnets, used in everything from military hardware to car windshield wiper motors, has proved to be an effective leverage point on U.S. industries.
TRUMP-XI MEETING?
In the background of the talks is speculation about a possible meeting between Trump and Xi in late October.
Trump has said he will decide soon on a landmark trip to China, and a new flare-up of tariffs and export controls would likely derail planning.
Sun Chenghao, a fellow at Tsinghua University's Center for International Security and Strategy in Beijing, said that a Trump-Xi summit would be an opportunity for the U.S. to lower the 20% tariffs on Chinese goods related to fentanyl. In exchange, he said the Chinese side could make good on its 2020 pledge to increase purchases of U.S. farm products and other goods.
"The future prospect of the heads of state summit is very beneficial to the negotiations because everyone wants to reach an agreement or pave the way in advance," Sun said.
Still, China will likely request a reduction of multi-layered U.S. tariffs totaling 55% on most goods and further easing of U.S. high-tech export controls, analysts said. Beijing has argued that such purchases would help reduce the U.S. trade deficit with China, which reached $295.5 billion in 2024. REUTERS
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
8 minutes ago
- Straits Times
Ireland's ‘economic miracle' at risk from Trump-EU tariffs
Find out what's new on ST website and app. Attracted by low corporate taxes, companies such as Pfizer, Google, Apple and Meta have based their European headquarters in Ireland. LONDON - The deal between the United States and the European Union may have averted a transatlantic trade war, but worries persist in Ireland where crucial sectors are dependent on US multinationals. Attracted primarily by low corporate taxes, huge pharmaceutical firms like Pfizer, Eli Lilly, and Johnson & Johnson, and tech giants like Apple, Google, and Meta have based their European headquarters there. The US investor influx has boosted Irish tax coffers and fuelled record budget surpluses in recent years. But President Donald Trump's tariffs – a baseline rate of 15 per cent on EU exports will apply across the board – present a stress test for the Irish economic model. Once one of western Europe's economic laggards, Ireland became known as the 'Celtic Tiger' thanks to a remarkable turnaround in the 1990s. A model built on low corporate tax and an English-speaking workforce in an EU country proved seductive to foreign investors, particularly from the US. Their presence drove rampant economic growth and would later help Ireland rebound from the financial crash of 2008. The transition was an 'Irish economic miracle,' said business studies professor Louis Brennan, of Trinity College Dublin. 'Ireland has advanced in a matter of decades from being one of the poorest countries of northwestern Europe to being one of the most prosperous,' he told AFP. In 2024, Ireland hiked its corporate tax rate from 12.5 to 15 per cent after pressure from the Organisation for Economic Co-operation and Development (OECD), but still anticipates a budget surplus of €9.7 billion (S$14.4 billion) for 2025. Ireland's 'spectacular' transformation 'may have been too successful because we are very dependent in many ways on American companies,' said Mr Dan O'Brien, director of the IIEA think-tank in Dublin. Pharma in front line Spared from the first round of Mr Trump's tariffs, pharmaceutical companies are now being targeted by the American administration, keen to repatriate production to home soil. Earlier this month, the US president threatened a 200 per cent levy on the sector. Irish Prime Minister Micheal Martin expressed mixed feelings at the July 27 deal of 15 per cent, welcoming that 'punitively high tariffs' were avoided. But 'higher tariffs than there have been' will make transatlantic trade 'more expensive and more challenging,' he added. The new 15 per cent levy sealed will be 'particularly unwelcome in Ireland,' Mr O'Brien told AFP. 'The pharmaceutical industry is very large relative to the size of the economy, and in recent times around half of its exports have gone to the United States,' he said. A Pfizer plant on the outskirts of Cork, southern Ireland. PHOTO: AFP Pharma employs about 50,000 people and accounted for nearly half of Irish exports in 2024, reaching €100 billion, up by 30 per cent year-on-year. 'Ireland's problem is that it is uniquely integrated into the United States economy,' said Mr O'Brien. 'There's no other European country like this. So Ireland is caught in the middle,' he said. Official data on July 28 showed that Ireland's economic growth contracted in the second quarter, a consequence of Mr Trump's tariff threats. Gross domestic product shrank 1 per cent in the April-June period on reduced exports by multinationals, government figures showed. It had expanded 7.4 per cent in the first quarter as companies ramped up exports to the United States in anticipation of Mr Trump's tariffs. Large pharmaceutical companies, particularly American ones, also host certain patents in the country to reduce their tax burden, which then boosts the Irish tax take. Tariffs 'risk strongly discouraging American companies from setting up their future factories in Ireland,' said Prof Brennan. The US could still decide to impose further tariffs on the sector following an ongoing probe into whether pharmaceutical imports pose a national security problem, he said. Tech firms with EU bases in Dublin who have also transferred part of their intellectual property rights will not be directly impacted by the imposition of tariffs on physical goods. The sector is also a 'significant area of investment and employment for Ireland, but at least from a US perspective, it seems outside the scope of the tariffs,' said economics professor Seamus Coffey, of University College Cork. Beyond tariffs, tech could be affected if the US decides to modify its tax regime to make it less attractive to set up in low-tax countries, said Mr Andrew Kenningham, of Capital Economics. AFP
Straits Times
8 minutes ago
- Straits Times
Chile will ask U.S. to include copper within U.S.-Chile trade deal
SANTIAGO - Chile expects U.S. copper tariffs to be discussed within broader U.S. trade talks in Washington this week, Finance Minister Mario Marcel said on Monday in an interview with local radio program Duna. Marcel added that Chile would ask for any tariffs to be included within a broader trade agreement with the United States. President Trump's administration has said it will impose 50% tariffs on copper imports as of August 1. Chile is the world's top supplier of the red metal and is also the biggest provider of refined copper to the U.S., although it sends much higher volumes to China. Monday marks the start of a third round of talks between Chilean officials and the office of the U.S. Trade Representative. "What we hope is that these conversations we're starting today in Washington will also cover the issue of copper," Marcel said. "Because it wouldn't be very useful for us to have a trade agreement that excludes more than half of our exports to the U.S., such as copper and wood." When asked if Chile would seek an exemption to the U.S. copper tariffs imposed by Trump, the minister said they would seek for any tariffs to be included in a broader trade pact. "We want it to be part of the agreement, within the broader commercial discussions with Chile — not something handled separately — because it's a very central issue," the minister said. Top stories Swipe. Select. Stay informed. Asia Cambodia, Thailand agree to 'immediate and unconditional ceasefire' to de-escalate border row Singapore Tanjong Katong sinkhole: Road recovery works progressing steadily, tests under way Singapore ST Explains: What we know about the Tanjong Katong sinkhole so far Singapore Foreign workers who rescued woman from sinkhole given tokens of appreciation Sport Gan Ching Hwee breaks 2 national records, qualifies for World Aquatics C'ships 1,500m final Asia Gunman kills 5 near Bangkok's Chatuchak market before taking own life Business SIA Q1 profit falls 59%; airline group sees volatile times ahead Singapore Man exposed daughter's identity despite court order after she was removed from his care Marcel noted that other countries have included exemptions and carve-outs in their trade agreements. REUTERS
Straits Times
8 minutes ago
- Straits Times
Trump eyes 'world tariff' of 15-20% for most countries
A container is loaded onto a cargo ship while docked at a port under the Port Authority of Thailand, following the announcement that U.S. President Donald Trump would impose tariffs of 36% on goods from Thailand starting on August 1, in Bangkok, Thailand, July 8, 2025. REUTERS/Athit Perawongmetha/File Photo TURNBERRY, Scotland - President Donald Trump said on Monday most trading partners that do not negotiate separate trade deals would soon face tariffs of 15% to 20% on their exports to the United States, well above the broad 10% tariff he imposed in April. Trump told reporters his administration will notify some 200 countries soon of their new "world tariff" rate. "I would say it'll be somewhere in the 15 to 20% range," Trump told reporters, sitting alongside British Prime Minister Keir Starmer at his luxury golf resort in Turnberry, Scotland. "Probably one of those two numbers." Trump, who has vowed to end decades of U.S. trade deficits by imposing tariffs on nearly all trading partners, has already announced higher rates of up to 50% on some countries, including Brazil, starting on Friday. The announcements have spurred feverish negotiations by a host of countries seeking lower tariff rates, including India, Pakistan, Canada, and Thailand, among others. The U.S. president on Sunday clinched a huge trade deal with the European Union that includes a 15% tariff on most EU goods, $600 billion of investments in the U.S. by European firms, and $750 billion in energy purchases over the next three years. That followed a $550-billion deal with Japan last week and smaller agreements with Britain, Indonesia, and Vietnam. Other talks are ongoing, including with India, but prospects have dimmed for many more agreements before Friday, Trump's deadline for deals before higher rates take effect. Trump has repeatedly said he favors straightforward tariff rates over complex negotiations. "We're going to be setting a tariff for essentially, the rest of the world," he said again on Monday. "And that's what they're going to pay if they want to do business in the United States. Because you can't sit down and make 200 deals." Canadian Prime Minister Mark Carney said on Monday trade talks with the U.S. were at an intense phase, conceding that his country was still hoping to walk away with a tariff rate below the 35% announced by Trump on some Canadian imports. Carney conceded this month that Canada - which sends 75% of its exports to the United States - would likely have to accept some tariffs. REUTERS
