In the wake of new tariffs, how are US-China trade talks going?
On Thursday, the White House issued a statement entitled 'Further Modifying the Reciprocal Tariff Rates', in which some 69 trading partners and their respective 'adjusted' tariff rates were listed.
These are changes to import levies since the tariffs announced on April 2 (and later paused until August 1), the day Donald Trump referred to as 'Liberation Day'. Rates have dropped for most countries, but not all. Most of the new tariffs will go into effect on August 7.
Imports from roughly 40 countries will face a new 15 percent rate on goods they export to the United States, while other nations' products will be hit with higher duties. The United Kingdom and Australia will pay 10 percent.
One notable exception from Trump's latest tariff list is China, the US's third-largest trading partner. So, what's the current state of play between the two countries?
How are US-China trade talks going?
Top officials from the US and China failed to agree on extending a 90-day pause on tariffs on Tuesday during the latest round of talks held in Stockholm, Sweden.
Any renewal of the pause, which is due to expire on August 12, will ultimately be up to Trump, US Treasury Secretary Scott Bessent said.
The talks, which took place in Rosenbad, the seat of government where the Swedish prime minister's office is located, were aimed at defusing a new trade spat between the world's two biggest economies.
The latest meeting, which was attended by Bessent and Vice Premier He Lifeng for Beijing, concluded just two days after Trump announced a new trade deal with the European Union.
It was the third meeting between the US and China since April, at which point the two sides had slapped each other with tariffs exceeding 100 percent in an escalating trade war.
On May 12, the two agreed a 90-day tariff pause in Geneva, easing a costly logjam which had upended trade. During the pause, US tariffs have been reduced from 145 percent to 30 percent, and Chinese duties from 125 percent to 10 percent.
But without a new trading agreement in place, global supply chains could face renewed turmoil if US and Chinese tariffs restart at triple-digit levels that would amount to a bilateral trade embargo.
What happened at the Stockholm meeting?
After the meeting, China's deputy commerce minister, Li Chenggang, said both sides were 'fully aware of the importance of safeguarding a stable and sound China-US trade and economic relationship'.
He told Chinese media that the two sides had held 'candid and constructive exchanges'.
For his part, Bessent told reporters at a briefing on Tuesday that the US had built momentum with recent US agreements with Japan and the EU. He remained sanguine about China.
'Just to tamp down that rhetoric, the meetings were very constructive. We just haven't given the sign off,' he said.
Bessent stressed that 'nothing is agreed until we speak with President Trump'.
The treasury secretary and US Trade Representative Jamieson Greer were due to brief Trump on Wednesday about the Stockholm discussions, he added.
Bessent also said that, given US secondary tariff legislation on sanctioned Russian oil, China could face high tariffs if Beijing continued with its Russian oil purchases.
Similarly, the US recently announced an unspecified penalty for India's purchase of Russian oil, on top of a 25 percent tariff on Indian exports.
What are the central issues in the trade talks?
Technology exports, specifically chips used for artificial intelligence, are understood to have been at the centre of this week's talks. In particular, US security officials have raised concerns that high-tech American semiconductor chips could be used by China's military.
In April, Trump was poised to block the export of Nvidia's H20 chip, which has been designed to comply with Biden-era export curbs. But Trump reversed course following direct appeals from Nvidia Chief Executive Officer Jensen Huang.
In the run-up to this week's talks, the UK's Financial Times newspaper reported that Washington had frozen restrictions on technology sales to China to ease negotiations and to avoid retaliation from Beijing in the form of export restrictions on rare earth minerals, as happened in May.
Rare earths are a group of 17 elements essential to numerous manufacturing industries, from auto parts to clean energy technology to military hardware. They are also a central issue for trade talks.
China has long dominated the mining and processing of rare earth minerals, as well as the production of related components, like rare earth magnets.
China's hold over the industry has been a key concern for US trade representatives since Donald Trump's return to the White House.
What was the state of US-China trade before the recent truce?
For years, Trump has criticised Beijing for what he deems to be unfair trade practices – namely, import quotas, government subsidies and tax breaks. He has even argued that the US's trade deficit with China, which snowballed to $20 trillion between 1974 and 2024, constitutes a national emergency.
When Trump paused reciprocal tariffs on dozens of countries on April 9, he made an exception for China. Beijing, in turn, retaliated with import levies of its own.
Tit-for-tat exchanges quickly snowballed into eye-watering sums. By April 11, US tariffs on Chinese goods had reached 145 percent, while duties on US products entering China had swelled to 125 percent.
Tensions were defused in May, when Bessent and He Lifeng agreed to a truce which slashed respective tariffs by 115 percentage points for three months.
For now, US duties on Chinese products are set at 30 percent while China's tariffs on the US have dropped to 10 percent.
What will happen next?
This week's talks may pave the way for a potential meeting between Donald Trump and Chinese President Xi Jinping later in the year, although on Tuesday, Trump denied going out of his way to seek one.
For Thomas Sampson, a professor of economics at the London School of Economics, a face-to-face meeting has 'the potential to be significant'. Equally though, it could be 'a grip-and-grin style summit, where nothing substantive is discussed', he told Al Jazeera.
Sampson added that US-China negotiations are more complex than those with other Asian countries, owing to China's grip on rare earth minerals, in addition to the fact that China 'has long been a target of Trump's'.
For now, Sampson said he believes that the 'mood around the [Sweden] talks seems more positive than earlier this year. Both sides, it seems, have stepped back from the brink'. His expectation is for a 'more restrained trade war' than before, if one is to resume.
On Friday, White House press secretary Karoline Leavitt said trade talks with China were 'moving in the right direction' and that Washington remains in 'direct communication' with Beijing.
What other trade deals has Trump concluded in recent weeks?
On top of Trump's Thursday tariff blitz, the latest US-China talks come after Washington struck deals with both the EU and Japan last week.
Last Sunday, Trump and European Commission President Ursula von der Leyen announced a trade agreement, ending a months-long standoff between two economic giants.
The EU accepted a 15 percent tariff on most of its exports, while the bloc's average tariff rate on US goods will drop below 1 percent once the deal goes into effect.
Brussels also said it would purchase $750bn in American energy products and invest $600bn more into the US, on top of existing commercial agreements.
France's Prime Minister Francois Bayrou said the EU had capitulated to Trump's trade threats, labelling the deal struck on Sunday as a 'dark day' for the EU.
Elsewhere, the US has also struck tariff deals with South Korea, Indonesia, Vietnam and the Philippines.
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