Officials are meeting in Sweden for their third round of talks in as many months, ahead of an Aug. 12 deadline, to try to avoid a flare-up in trade tensions.
Treasury Secretary Scott Bessent, front left, and Chinese Vice Premier He Lifeng, front right, are leading the talks, the first round of which took place in May in Geneva, where they set a 90-day deadline for a comprehensive trade deal. (Martial Trezzini/Keystone/EDA/Reuters)
The United States and China are set to begin their third round of trade talks in as many months on Monday, their latest bid to tamp down a tariff war that risks upending global supply chains and further straining relations between the world’s two largest economic powers.
“We’ll be working out what is likely an extension,” Bessent said last week, to the 90-day trade truce, agreed on during talks in mid-May.
At the time of that truce, Washington had imposed a minimum tariff of 145 percent on Chinese goods, and Beijing retaliated with levies of at least 125 percent. In Geneva, they agreed to reduce their tariffs while they held further talks: The Trump administration cut its minimum levies on Chinese goods to 30 percent, and Beijing reduced its blanket tariffs on American products to 10 percent.
hina accounts for 70 percent of the world’s rare-earth mining and, more important, more than 90 percent of the processing.
It has used this dominance as a bargaining chip in the trade talks, imposing a new set of export restrictions in April on rare earths, a group of 17 metals used in a wide array of products in the defense, health care and technology sectors.
Those restrictions led to widespread concern across the Trump administration and key parts of the U.S. economy, causing Washington to soften its tone. In late June, Beijing agreed to loosen export restrictions and approve permits for rare-earth elements and rare-earth magnets.
This month, Washington reversed course and said it would allow Nvidia to sell its H20 artificial intelligence chips to China after banning their sale in April.
In recent weeks, the U.S. has also softened its tone toward Beijing. Bessent told Fox Business last week that “trade is at a good place with China” and that talks are “constructive.”
“We’ll be talking about a lot of other things our countries can do together,” he said. However, Bessent also noted a significant point of contention for Washington and Beijing: China’s support for Russia and its war against Ukraine.
This week’s talks come amid a flurry of other deals that President Donald Trump has hailed in recent days, with most other countries in the president’s firing line facing an Aug. 1 deadline.
The U.S. and E.U. said Sunday that they had agreed to the contours of a trade deal, and Trump touted renegotiated deals with Japan, Vietnam, the Philippines and Indonesia this month, although few details have been released.
The E.U. and Japan agreed to 15 percent tariffs on their products — down from Trump’s threatened 30 and 25 percent, respectively — while Vietnam settled on 20 percent and Indonesia and the Philippines 19 percent.
Gary Ng, a senior Asia Pacific economist for Natixis, an investment bank, said Beijing seems ready to accept higher U.S. tariffs than those imposed on other countries in Asia but would like to see “more certainty” that the U.S. would ease some restrictions on semiconductor chip exports to China.
In return, he said the United States “will be looking for some action or commitment from China in helping to solve the whole issue of fentanyl” and will also want to push more U.S. products into China to address the whopping trade deficit.
