U.S. and China set to negotiate tariffs, aiming to extend the currently established ceasefire
US-China Trade Talks in Stockholm: No Breakthrough, but 90-Day Extension Likely
The ongoing trade negotiations between the US and China in Stockholm have not resulted in a significant breakthrough, but there is a likelihood of a 90-day extension to maintain the tariff and export control truce.
The US-China trade war has reached a deadlock on key issues, including export restrictions and China's purchases of Russian oil. As of July 2020, no extension of tariff deadlines has been agreed upon yet. The talks have focused on stabilizing the trade relationship and pausing tit-for-tat tariff increases, but critical points remain unresolved, risking a restart of aggressive trade measures.
The negotiations are being led by US Treasury Secretary Steven Mnuchin and Chinese Vice Premier He Lifeng. An extension of 90 days would prevent further escalation and help create conditions for a potential meeting between President Donald Trump and Chinese President Xi Jinping in late October or early November.
Meanwhile, the US has made its biggest trade deal with the European Union, accepting a 15 per cent tariff on its goods exports to the EU and agreeing to significant EU purchases of US energy and military equipment. This deal is separate from the US-China trade negotiations.
The South China Morning Post reported that unnamed sources said the US and China would refrain from introducing new tariffs or taking other steps that could escalate the trade war for another 90 days. However, the White House and US Trade Representative's office did not respond to requests for comment on the report.
On a separate note, the US and the European Commission President Ursula von der Leyen reached a deal on Sunday in Scotland, calling for $600 billion in investments in the US by the EU.
The potential meeting between Trump and Xi Jinping in late October or early November is contingent on the 90-day extension. Without an agreement, global supply chains could face renewed turmoil from duties exceeding 100 per cent.
In June, a preliminary deal was reached between China and the US to end weeks of escalating tit-for-tat tariffs. However, the progress made in the Stockholm talks remains to be seen. The Biden administration is reviewing the situation and considering a possible 90-day extension to maintain the tariff pause, reflecting cautious optimism but ongoing tensions.
The trade talks in Stockholm between the US and China, though yielding no substantial breakthrough, may likely span another 90 days to maintain the tariff truce, bringing the potential for a meeting between President Donald Trump and Chinese President Xi Jinping in October or November. Meanwhile, the US has engaged in significant business with the European Union, including agreeing to a 15% tariff on its goods exports and EU purchases of US energy and military equipment, a deal separate from the US-China negotiations. The negotiations' progress and potential 90-day extension remain subject to review by the Biden administration, demonstrating a cautious approach amid ongoing industry, finance, and political tensions.
