US and China Begin Crucial Trade Talks in Stockholm Today Amid Tariff Standoff
US and China Begin Crucial Trade Talks in Stockholm Today Amid Tariff Standoff
Top U.S. and Chinese officials commenced pivotal trade talks in Stockholm today, Monday, July 28, 2025, with analysts anticipating agreements to maintain current tariff levels while paving the way for a potential leaders’ summit later this year.
U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are holding their third round of discussions this year in the Swedish capital. These high-stakes talks come nearly four months after President Donald Trump’s sweeping tariff proposals, including a 145% import tax on Chinese goods, significantly impacted global trade.
“We have the confines of a deal with China,” President Trump stated last Friday, before departing for Scotland. Secretary Bessent confirmed on Wednesday that previous talks in Geneva and London established a “status quo,” with the U.S. applying a 30% tariff on Chinese imports and China responding with a 10% tariff, in addition to pre-Trump second term duties.
Bessent indicated the focus would now shift to rebalancing the economic relationship, addressing the U.S.’s $295.5 billion trade deficit from last year. The U.S. aims to boost exports to China and encourage a shift towards domestic consumer spending within the Chinese economy. The Chinese embassy in Washington expressed hopes for “more consensus and cooperation and less misperception” from the current talks.
The Stockholm meeting is seen as crucial for establishing a timeline and viability for a potential summit between President Trump and Chinese leader Xi Jinping. Wendy Cutler, a former U.S. trade negotiator, highlighted that Beijing will likely demand detailed preparations before agreeing to such a high-level meeting. Discussions are expected to cover commercial announcements for a leaders’ summit and address “major irritants” like China’s industrial overcapacity and its control over fentanyl precursor chemicals.
A key point of contention is the 20% fentanyl-related tariff imposed by Trump earlier this year, which China is expected to demand its removal. This particular tariff escalated after Trump cited China’s alleged failure to curb the outflow of drug-making chemicals. While previous talks saw a reduction from three-digit tariffs, the U.S. maintained the 20% fentanyl tariff alongside a 10% baseline rate, mirrored by China’s 10% on U.S. products.
Beyond tariffs, the U.S. is pressing China on industrial overcapacity and its purchases of Russian and Iranian oil. Chinese Premier Li Qiang recently acknowledged the issue of overcapacity, stating, “Some people think this will cause some new problems in the balance of supply and demand in world production. We see this problem too.” However, experts suggest that China might demand U.S. security concessions in return for addressing oil purchases, which would likely face political opposition in Washington.
Analysts anticipate a more limited agreement, possibly centered around fentanyl, rather than a grand trade deal, as this outcome might be preferred by certain factions within the Trump administration.
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