As trade tensions between the world’s two largest economies continue to rattle global markets, hopes for renewed stability have emerged. Top U.S. and Chinese economic officials are set to begin new negotiations in Stockholm, Sweden, aiming to extend the current tariff truce for another 90 days and avoid a new round of trade escalation.
New Round of Talks in Stockholm: A Step Toward Easing Tensions
According to sources familiar with the planning, the negotiations will begin on Monday afternoon local time at Rosenbad, the Swedish Prime Minister’s office. On Monday morning, U.S. and Chinese national flags were raised at the building—symbolizing the significance of this diplomatic encounter.
The primary objective of the talks is to reach an agreement on extending the tariff truce that began in mid-May. This pause has so far prevented a further breakdown in trade relations and provided relief to global supply chains.
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August 12 Deadline: High Stakes for Both Sides
China faces a critical deadline on August 12 to finalize a lasting tariff agreement with the Trump administration. If no deal is reached, the U.S. is expected to reimpose triple-digit tariffs, which would effectively act as a bilateral trade embargo—causing significant disruption in global trade.
While analysts don’t expect a major breakthrough from the Stockholm talks, many predict a 90-day extension of the current truce is likely. This move would buy more time and potentially pave the way for a high-level meeting between President Trump and Chinese President Xi Jinping in late October or early November.
New Tariffs Looming: Global Markets on Edge
Despite the ongoing talks, the U.S. is reportedly preparing a new round of sector-specific tariffs on key Chinese industries. These include semiconductors, pharmaceuticals, port cranes, and other strategic products—posing additional challenges to China’s export sector.
A U.S. Treasury spokesperson declined to comment on a South China Morning Post report which claimed, based on unnamed sources, that both sides have agreed to refrain from new tariffs or any other escalatory measures for another 90 days.
Conclusion
The upcoming trade discussions in Stockholm may not lead to a sweeping resolution, but a 90-day extension of the tariff truce could mark a critical turning point. This would give both nations room to maneuver and ease tensions ahead of a potential Trump-Xi summit in the fall. For global investors and businesses, even a temporary pause offers much-needed clarity in an increasingly uncertain economic climate.
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