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Post Reply: US and China Resume Trade Talks in Stockholm to Ease Tariff Tensions

<blockquote><div class="quotetitle">Quote from <a class="profile-link highlight-moderator" href="https://lawguide.co.ke/understanding-law/legal-forum/profile/lawyer/">Lawyer</a> on July 29, 2025, 1:38 pm</div><div id="pl-7282"  class="panel-layout" ><div id="pg-7282-0"  class="panel-grid panel-no-style" ><div id="pgc-7282-0-0"  class="panel-grid-cell"  data-weight="1" ><div id="panel-7282-0-0-0" class="so-panel widget widget_sow-editor panel-first-child panel-last-child" data-index="0" data-style="{&quot;background_image_attachment&quot;:false,&quot;background_display&quot;:&quot;tile&quot;,&quot;background_image_size&quot;:&quot;full&quot;,&quot;background_image_opacity&quot;:&quot;100&quot;,&quot;border_thickness&quot;:&quot;1px&quot;}" ><div
			
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	<p dir="ltr" data-pm-slice="1 1 []">On July 29, 2025, officials from the United States and China gathered in Stockholm, Sweden, for a second day of high-stakes negotiations aimed at de-escalating a trade war that has strained relations between the world's two largest economies. The talks, held at Rosenbad, the Swedish prime minister's office, are focused on resolving longstanding economic disputes and preventing the reimposition of crippling tariffs that could disrupt global supply chains. While immediate breakthroughs are not anticipated, both sides are exploring the possibility of extending a tariff truce established in mid-May, which could provide a 90-day window to continue negotiations and potentially pave the way for a landmark meeting between US President Donald Trump and Chinese President Xi Jinping later in 2025.</p>
<p dir="ltr">The US-China trade war has been a persistent challenge, with tensions escalating since early 2025. The conflict intensified when the US imposed tariffs as high as 145% on Chinese goods, citing unfair trade practices and concerns over China's export-driven economic model. In retaliation, China implemented 125% tariffs on US imports, bringing bilateral trade worth nearly $600 billion annually to a near standstill. These measures have disrupted global markets, prompting layoffs, raising wholesale prices, and creating uncertainty for businesses reliant on cross-border trade. Earlier talks in Geneva and London in May and June resulted in preliminary agreements to reduce tariffs from triple-digit levels and restore the flow of critical goods, such as rare earth minerals from China and advanced technology products like Nvidia's H20 AI chips from the US.</p>
<p dir="ltr">The Stockholm negotiations are led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng. The US delegation, which includes US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick, is pushing for China to rebalance its economy toward domestic consumption and address concerns about state subsidies that flood global markets with low-cost goods. China, meanwhile, is seeking a reduction in the US's multi-layered tariffs, which currently include a 20% duty related to the fentanyl crisis, a 10% reciprocal tariff, and 25% duties on most industrial goods from Trump's first term. Beijing also wants the US to ease export controls on high-tech goods, arguing that these restrictions hinder Chinese economic growth.</p>
<p dir="ltr">Both sides face a critical deadline on August 12, 2025. Without an agreement or an extension of the current truce, tariffs could revert to their peak levels, effectively creating a trade embargo. To avoid this, negotiators are working toward extending the 90-day tariff pause, which would maintain stability and allow further discussions. The US has already paused some tech export restrictions to support the talks, a move seen as a gesture to facilitate progress.</p>
<p dir="ltr">The Stockholm talks are not only about trade but also carry significant geopolitical weight. Analysts suggest that a successful outcome could set the stage for a meeting between Trump and Xi in late October or early November, potentially marking a turning point in US-China relations. However, Trump has publicly downplayed his interest in such a meeting, stating on his Truth Social platform that he would only visit China at Xi's invitation. Despite this, the negotiations are seen as a step toward stabilizing bilateral ties, especially as both nations navigate complex global dynamics, including China's dominance in rare earth minerals and the US's push to reduce its $295.5 billion trade deficit with China in 2024.</p>
<p dir="ltr">The talks also occur against the backdrop of other diplomatic developments. Taiwan's President Lai Ching-te has delayed a proposed August visit to the US, which could have provoked Beijing and jeopardized the trade negotiations. China views Taiwan as its territory and opposes any US support for Taipei, making the delay a strategic move to keep the focus on economic discussions.</p>
<p dir="ltr">The Stockholm meetings follow successful US trade deals with other partners, such as Japan, the Philippines, and the European Union, which have accepted tariffs ranging from 15% to 20%. These agreements have set a benchmark for negotiations, but the US-China relationship is far more complex due to the scale of their trade and competing strategic interests. China's control over rare earth minerals, essential for industries from automotive to defense, gives it significant leverage. Meanwhile, the US is pressing for structural changes in China's economy, a demand Beijing has resisted, attributing its export success to innovation rather than subsidies.</p>
<p dir="ltr">Analysts remain cautious about the prospects for a comprehensive deal. The trade war has deep roots, with both sides entrenched in their positions. The US accuses China of flooding markets with cheap goods, while China criticizes US export controls as an attempt to suppress its technological advancement. Despite these challenges, the willingness to engage in dialogue signals a mutual recognition of the need to avoid further escalation, which could have devastating consequences for the global economy.</p>
<p dir="ltr">As the Stockholm talks continue, the global business community is watching closely. An extension of the tariff truce would provide temporary relief, allowing companies to plan investments and stabilize supply chains. However, a long-term resolution will require compromises on contentious issues, such as tariff reductions, export controls, and economic reforms. The outcome of these negotiations could shape not only US-China relations but also the trajectory of global trade in an increasingly interconnected world.</p>
<p dir="ltr">The talks are expected to resume on subsequent days, with both delegations maintaining a low profile to avoid media speculation. While no immediate statements were made after the first day's discussions, which lasted over five hours, the presence of high-level officials and the neutral setting of Stockholm underscore the importance of finding common ground. As the August 12 deadline looms, the world awaits the next steps in this critical effort to ease trade hostilities and foster economic stability.</p>
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