US, China Officials to Meet in Sweden for Trade Talks

Bloomberg

28-07-2025

00:00
Is now sort of a sense of optimism in the air. I think the expectation is that we are likely to get another extension on the US-China fronts, which implies there's no final deal yet. So what are still the sticking points between the US and China right now? Yeah, well, I think there is a sort of open question as to conceptually what a final deal with the United States is on trade. But certainly the Chinese are further away from one than the Europeans from what they clinched over the last the last 24 hours. And the Chinese basically are trying to get another a further extension on the runway for that trade deal that would expire, that truce that would expire on August the 12th. And just to remind everybody where we are, because it's hard to keep track of all of these numbers, the U.S. had imposed 125% tariffs on China that basically foreclosed any ability to have any trading between the two biggest economies in the world. And that was sort of talked down to this truce. And now we're stuck at these 30% tariffs, ten of which are sort of universal retaliatory tariffs and 20% of which are from these sort of fentanyl tariffs that the Trump administration has put forward. What we will get today is the beginning of the third talks between the vice premier of China and the US Treasury Secretary, Scott Bessen, who will be here over the next couple of hours in Stockholm to have those negotiations. The desired outcome here is probably another 90 day extension truce to that truce. We have some reporting from the Chinese media that that is already basically almost fully secured. The question will be then what will come next? Where will they be able to make progress on the other issues that they would like to discuss and they would like to see some changes? There is, of course, the main sort of elephant in the room here, which is a rare earth minerals and those advanced AI chips that the US has capitulated on agreed to sell to China in exchange for those rare earth metals. What they will also likely be discussing is the continued purchasing of crude oil and fossil fuels from Russia, from Iran, which are sanctioned by the G7 and the and the United States. And of course, there are some other issues like Tik-Tok, right? There is the fact that the US government, that the US there is apparently a US buyer for TikTok that still needs a Chinese sign off. So these are some of the conversations that'll be happening here in Stockholm over the next couple of hours. Yeah, I mean, the thing about President Trump is he also likes to make a big show of having achieved these these trade deals or getting to these trade agreements with various counterparts. And you've got to wonder whether in this case, perhaps he's holding off to make that big announcement side by side with President Xi later this year. What do we know about the prospects of the two leaders meeting at some point? Yeah. So he definitely has an instinct for the sort of showmanship and the sort of TV production side of things. And I think that if you were to get a sort of momentous large deal between the Chinese and the United States, it is the sort of thing that Donald Trump probably himself would like to bring into being. I mean, this is basically what we saw with the EU, right? We had Ursula von der Leyen flying up to Scotland in order to have the person in person meetings that Trump could announce at alongside her, you know, in person. So, I mean, the Chinese, we understand that there was a call between Xi Jinping and Trump. We understand that there has been an invitation extended to the President of the United States and the first lady to come to China at some point. We are probably still some distance away from that. We should say that the fact that these discussions are happening between the Chinese and the United States and, you know, sort of neutral territory was in Switzerland, in the U.K. and now in Stockholm, really wants to sort of demonstrate the idea that nobody wants to be seen to be being pulled in either one of the directions. So I think we're probably still some distance away from that. That being said, this is the kind of announcement, Jomana, that as you expect, you think that the president of the United States would like to make right next to the the premier of China to really have the sort of full impact of what would be really a momentous trade deal and really one of the most important pledges of the Trump administration in that campaign, saying that basically he's going to solve the trade problem with China.