US, China agree to continue talks on tariff truce extension

Business Times

29-07-2025

[NEW YORK] Treasury Secretary Scott Bessent said that the US and China will continue talks over maintaining a tariff truce before it expires in two weeks, and that US President Donald Trump will make the final call on any extension.
Bessent, who led the US delegation with Trade Representative Jamieson Greer, said in Stockholm that he will brief Trump on Wednesday (Jul 30) on the remaining issues.
'There's still a couple of technical details to work out,' Bessent told reporters on Tuesday, after two days of meetings with officials from Beijing led by Vice-Premier He Lifeng.
After news emerged that China's delegation had indicated a 90-day extension of the two economies' trade-war truce was agreed, Bessent said, 'I think our Chinese counterparts have jumped the gun a little.' Asked on CNBC whether he'd recommend that Trump extend the pause, he said that he would give Trump the facts, 'then he will decide'.
The Stockholm negotiations marked the third round of US-China trade talks in less than three months. They wrapped up ahead of an Aug 12 deadline to resolve differences during a 90-day suspension of sky-high tariffs that had threatened to cut off bilateral trade between the world's largest economies. Adding an extra 90 days is one option, Bessent said on Tuesday.
Chinese trade negotiator Li Chenggang told reporters that both sides agreed on maintaining the truce, without elaborating on how long. He added that the conversations in the Swedish capital were candid, in-depth and geared for continued close communication.
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'While there is disappointment that nothing material was agreed, the mood seems to be constructive and optimistic about future potential deals,' Kelvin Lam, senior China economist at Pantheon Macroeconomics in London, said in an initial assessment.
The Stockholm round came on the heels of the Trump administration reaching preliminary tariff deals with Japan and the European Union. Bessent said that his Chinese counterparts were in 'more of a mood for a wide-ranging discussion'.
Magnet talks
At issue in the ongoing dialogue is how the two countries seek to maintain a stable trading relationship while applying barriers such as tariffs and export controls to limit each other's progress in critical sectors ranging from battery technology and defence to semiconductors.
Greer said that the US wants assurances that critical materials such as magnets keep flowing so the two sides can focus on other priorities. 'We don't ever want to talk about magnets again,' he said.
Greer said that the resumption of China's rare earths exports is Beijing's biggest concession so far. Asked if the US made any commitments to China on its pending 232 investigations, Greer said China asked for status updates on them, but stressed that the eventual duties would be applied globally and not have any exemptions for particular countries.
He also said China asked about the Trump administration's so-called 232 investigations into sectors such as copper, semiconductors and pharmaceuticals, and the US explained that those involve global tariffs with no exceptions for individual countries.
Reducing the 20 per cent tariffs that Trump imposed over US claims that Chinese companies supply chemicals used to make the illegal drug fentanyl is also a high priority for Beijing, Eurasia Group analysts wrote in a note last week.
The sticking points in the relationship extend beyond cross-border commerce. Earlier, Taiwanese President Lai Ching-te appeared to call off an overseas trip planned for next week after the Trump administration failed to approve his stopover in the US.
Trade tensions have risen recently as both sides try to apply industrial leverage. China has recently exerted its dominance in rare earth minerals for concessions from the US on advanced chips needed for Beijing's ambitions in artificial intelligence.
That softening from US President Donald Trump has worried China hawks in Washington that the administration is giving up too much by easing export controls to strike a deal and hold a summit with President Xi Jinping.
Leaders' meeting
The US president late Monday in Scotland pushed back at such suggestion, posting on social media that he's not pushing for a summit with Xi. '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!' Trump wrote.
In the background of the latest trade talks between Washington and Beijing is the race by several economies to sign tariff deals with Trump before Aug 1, when he's threatening to impose so-called reciprocal import taxes on the US's major trading partners.
On Sunday, he announced a preliminary deal with the European Union to apply 15 per cent tariffs on EU goods shipped to the US.
Speaking on Tuesday on CNBC, Commerce Secretary Howard Lutnick cast many of the issues surrounding the US-EU trade pact as still up for discussion, saying there was 'plenty of horse trading left to do'. BLOOMBERG