US, China seek 90-day trade ceasefire in fresh round of talks

On Monday, the United States and China returned to the negotiating table, aiming to extend their fragile trade truce by another 90 days and stave off a new wave of tariffs that could destabilise global supply chains. Senior economic officials from both countries are meeting in Stockholm to hash out differences ahead of an August 12 deadline. Without a deal, existing US duties on Chinese goods could snap back to triple-digit levels, effectively triggering a new phase of the trade war.

As per Reuters, the talks follow a series of preliminary deals in May and June that temporarily paused tariffs and export controls on sensitive goods like rare earths and AI chips. The new round is expected to focus on locking in the tariff ceasefire and setting the stage for a potential Trump–Xi summit later this year. Unlike the major US–EU trade agreement signed on Sunday, which introduced a 15 per cent tariff framework and $750 billion in energy purchases, the US–China talks are reportedly expected to produce only a temporary extension, not a full-blown deal.

Trade analysts told Reuters that another 90-day pause is likely, which would allow both sides to avoid an escalation and maintain space for diplomacy. Such a truce would also help facilitate a meeting between President Donald Trump and Chinese President Xi Jinping, potentially in October or November.

Deep-rooted issues remain untouched

The discussions so far have been narrowly focused on halting retaliation. Talks in Geneva and London earlier this year dealt with tariff reductions and the resumption of rare earth and chip exports, but avoided the core ideological clash between the two economies. “The talks are not yet addressing the fundamental disagreements,” said Scott Kennedy, a China economics expert at the Center for Strategic and International Studies, as quoted by Reuters. “I’d be surprised if there is an early harvest… but an extension of the ceasefire for another 90 days seems the most likely outcome.”

Among Washington’s long-standing concerns are China’s state-led, export-driven industrial model and its impact on global prices. Meanwhile, Beijing has pushed back against US national security export controls, which it says are designed to limit Chinese tech growth.

High-stakes timing for Trump and global markets

The urgency is heightened by the political and economic backdrop. Trump’s administration is preparing to impose new sectoral tariffs in coming weeks, targeting semiconductors, pharmaceuticals, ship-to-shore cranes, and other industrial goods. On the Chinese side, control over rare earth minerals, used in military systems and EV components, remains a key bargaining chip. China has also renewed its push for tariff relief on US-imported fentanyl precursors, in exchange for fulfilling a 2020 pledge to purchase more American farm goods.

“There’s a shared interest in avoiding escalation,” said Sun Chenghao, a fellow at Tsinghua University’s Center for International Security and Strategy, as quoted by Reuters. “A Trump-Xi summit would give both sides a political boost and a chance to pave the way toward real progress.”

What’s next?

If the Stockholm talks succeed, Washington and Beijing would likely announce a 90-day freeze on new tariffs, preventing automatic increases and maintaining the status quo through early November. But if the talks falter, both economies and global supply chains, could face renewed disruption.

The prospect of a Trump visit to China is also hanging in the balance. A successful summit could unlock deeper reforms, but failure could plunge the two superpowers back into a full-blown economic standoff, just as Trump sharpens his re-election pitch and Xi faces domestic pressure over China’s sluggish recovery.

(With inputs from the agencies)