Amid global trade tensions, all eyes are on Sweden's important role in China-US trade relations and hosting crucial discussions. With the 90-day tariff moratorium set to expire soon, the two countries are gearing up for high-stakes international trade talks in Stockholm. Here's a detailed look at the latest developments, what's at stake, and how these negotiations could shape the China-US economic partnership and beyond.
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| China-US trade talks in Stockholm: Will the 90-day tariff pause hold |
What’s Happening with China-US Tariff Consultations
US-China trade talks are entering a crucial phase, where negotiators will meet in Stockholm through July 28, 2025, to discuss extending the tariff pause. This follows a temporary ceasefire agreement in May 2025 that reduced US tariffs on Chinese goods from 145% to 30% (including a 20% tariff related to fentanyl and a 10% reciprocal tariff), and Chinese tariffs on US goods from 125% to 10%. The current 90-day tariff pause is set to expire on August 12, 2025, and both sides are pushing to further advance trade talks to avoid a return to punitive tariffs.
The talks, led by US Treasury Secretary Scott Bessant, Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer with Chinese Vice Premier He Lifeng, are aimed at stabilising China-US economic relations. While no major breakthrough is expected, the focus is on preventing escalation of tensions and addressing key issues such as US concerns over China's industrial overcapacity and fentanyl-related trade policies.
Why Sweden for Trade Discussions
Sweden emerging as a neutral host for these trade negotiations is no coincidence. With its balanced diplomatic stance and strong economic ties with both the US and China, Sweden provides a favorable environment for international trade agreements. Swedish Prime Minister Ulf Kristersson has emphasized the importance of mutual understanding, given the global implications of the China-US trade suspension talks. Sweden's National Board of Trade is also actively supporting businesses facing potential US tariff impacts, highlighting its active role in Sweden's international trade.
How Did We Get Here? The Road to Tariff Delay Negotiations
The visit to Stockholm follows the first round of US-China economic talks in Geneva (May 2025) and London (June 2025). These talks, described by US President Donald Trump as a “complete rescheduling,” resulted in an initial 90-day tariff pause and the lifting of some restrictions, such as China’s export controls on rare earth minerals and US limits on Nvidia’s AI chip sales. However, deeper issues—such as the US trade deficit, which grew 17% year-on-year in 2024, and China’s export-driven economic model—remain unresolved, increasing the urgency to continue tariff talks in Sweden.
What’s at Stake in China-US Economic Talks
The China-US economic partnership is under scrutiny as the two countries deal with complex issues:
- Trade imbalance: The US is pressuring China to move from an export-led economy to a consumer-led model, as it worries about excess industrial capacity in global markets.
- Technology and security: China wants an easing of US sanctions on advanced technology such as Nvidia's H20 AI chip, while the US is concerned about China's purchases of Russian and Iranian oil.
- Global markets: The extension of the tariff moratorium has already sent stock indices in Hong Kong, the US and Europe surging. If it is not extended, supply chains could be disrupted and retaliatory tariffs could be imposed by partners such as the EU, Japan and Canada.
Analysts such as Plenum's Bo Zhengyuan see the Stockholm talks as a possible precursor to the Trump-Xi Jinping meeting scheduled for late 2025, although hopes for a resolution of structural issues are low.
The Bigger Picture: International Trade Negotiations
The China-US tariff consultations are not operating in a vacuum. They are part of broader international trade agreements that could reshape global commerce. The EU, for example, is preparing for its own trade talks with the US by August 1, 2025, and is keeping a close eye on Stockholm. Meanwhile, Sweden's trade discussions underscore its growing influence as a mediator in global trade disputes.
What’s Next for US-China Trade Talks
As the Stockholm talks progress, the world awaits to see whether trade talks will continue to expand or whether deeper tensions will re-emerge. For now, the China-US economic talks are all about maintaining stability, but time for the 90-day tariff pause is running out fast. Will this lead to a permanent China-US economic partnership, or is it just another delay in the ongoing trade saga? Keep an eye on these international trade talks as they progress.
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