For the third time in as many months, US and Chinese officials are meeting in Europe for trade talks.
This time, China is arriving with newfound confidence.
China’s Strengths on Display
China’s tight hold over strategic minerals has forced the US to relax certain export restrictions.
This includes reversing a ban on the sale of a crucial Nvidia AI chip.
Despite the ongoing trade war, China’s economy has performed better than expected, with government data showing a record trade surplus.
Chinese exports have proved resilient, shifting focus away from the US market.
Just days ago, Beijing signaled its firm stance again at a key EU summit, offering little on trade imbalances or the Ukraine issue.
Confident China Heads to Stockholm
The new round of talks in Stockholm begins Monday.
China’s Vice Premier He Lifeng will lead the delegation.
Their tone is expected to be assertive, pushing for further US concessions.
On the American side, Treasury Secretary Scott Bessent will lead negotiations.
He said the talks aim to extend the current trade truce, which ends August 12.
The Fragile Trade Truce
The 90-day truce began during a May meeting in Geneva.
It temporarily paused high tariffs that nearly brought trade to a halt.
Follow-up talks in London during June kept the agreement alive.
Stockholm could now determine whether the détente will last longer and if deeper issues, like tech restrictions, can be resolved.
Trump’s Softer Stance
President Trump recently signed several trade deals with the UK, Japan, and the EU.
His tone toward China has shifted.
He’s expressed interest in visiting the country soon at Xi Jinping’s invitation.
In a meeting with European Commission President Ursula von der Leyen, Trump said a deal with China is “very close.”
He gave no further details but suggested a deal was essentially in place.
Expert Opinions and Risks
Josh Lipsky of the Atlantic Council believes another short-term deal is most likely.
He predicts a 90-day extension with tariffs remaining at 30%.
He also expects a Trump-Xi meeting in the fall.
Still, he warned the situation could “turn on a dime.”
Recent bans placed by China on a US Commerce Department employee and a Wells Fargo executive have added tension.
US Commerce Secretary Howard Lutnick called the move “outrageous.”
Positive Signals, Yet Challenges Remain
Despite tensions, Bessent remained optimistic.
He told Fox Business that US-China trade is in “a very good place.”
He said talks would include China’s oil trade with Russia and Iran.
The proposed TikTok US spinoff, still awaiting Beijing’s approval, is also on the table.
China’s Key Demands
According to Chinese experts, Beijing’s top priority is the removal of remaining US tariffs.
These include:
- A 10% “reciprocal” tariff from April
- A 20% fentanyl-related levy
- Pre-existing duties
China recently added more fentanyl precursors to its controlled substance list, signaling cooperation.
He Weiwen, from the Center for China and Globalization, said building on prior agreements and pushing for “tangible results” is vital.
Tech Curbs and Supply Chain Leverage
Beijing also wants the US to relax tech export controls.
These include blacklisting hundreds of Chinese companies under the Commerce Department’s Entity List.
The tech restrictions began under Trump and expanded under Biden.
Wu Xinbo, a foreign policy adviser, said the US has realized China’s power in global supply chains.
These include rare earths, electronics, EV batteries, and drones.
Rare Earths and Strategic Moves
During peak tensions, China imposed licensing rules on rare earth mineral exports.
This caused a sharp decline in exports despite the truce.
In response, Trump added new US export controls on chip software and engines.
Peace talks in London restored the flow of minerals, and some US restrictions were lifted.
Still, Wu believes China has learned to use its leverage more deliberately.
He pointed to other cards China could play – including control over TikTok US.
Looming Oil and Ukraine Issues
Bessent plans to warn Beijing over its sanctioned oil purchases from Russia and Iran.
Trump has threatened 100% secondary tariffs on goods from such countries.
New legislation on this front is gaining traction.
Wu said China won’t likely stop oil imports but may consider the US threats as part of broader negotiations.
