On July 29, 2023, U.S. and Chinese officials concluded a significant two-day meeting in Stockholm aimed at addressing longstanding economic disputes and mitigating the escalating trade war between the two largest economies in the world. Although the talks did not yield any major breakthroughs, they marked an important step towards stabilizing bilateral relations.
During the discussions, China's chief trade negotiator, Li Chenggang, announced that both parties agreed to pursue an extension of the existing 90-day tariff truce established in mid-May. However, no specific timeline or duration for this extension was provided. The potential for extending the truce is crucial as both nations seek to avoid escalating tensions that could lead to further economic fallout.
The outcomes of the Stockholm talks could set the stage for a potential meeting between U.S. President Donald Trump and Chinese President Xi Jinping later this year. While Trump has downplayed any active pursuit of such a meeting, the absence of mention from Chinese officials indicates that both sides are cautiously optimistic about future engagements.
In recent months, President Trump has successfully negotiated trade deals with various partners, including the European Union and Japan. However, the intricacies of dealing with China, particularly due to its dominant economic position and control over global rare earth elements, make these discussions particularly challenging. In May, both nations had previously stepped back from implementing exorbitant triple-digit tariffs, which would have created a de facto trade embargo.
The absence of a solid agreement could lead to renewed instability in global supply chains and financial markets. The International Monetary Fund (IMF) recently raised its global growth forecast but also highlighted the potential resurgence of tariff rates as a significant risk factor. This indicates that the stakes are high, and both nations must strive for a resolution to avoid further economic turmoil.
As the situation develops, the world will be watching closely to see how U.S.-China relations evolve, and whether further negotiations can lead to lasting peace in global trade.
This report was crafted by a team of seasoned reporters, including David Lawder, Greta Rosen Fondahn, Maria Martinez, Janis Laizans, and Marie Mannes in Stockholm. Additional insights were provided by Ethan Wang, Liz Lee, Yukun Zhang, Ryan Woo in Beijing, along with Terje Solsvik and Gwladys Fouche in Oslo. The article was written by Matthias Williams and edited by Emelia Sithole-Matarise and Rod Nickel.
Maria Martinez is a Reuters correspondent based in Berlin, focusing on German economics and the ministry of finance. Her extensive experience includes roles at Dow Jones Newswires in Barcelona and Bloomberg in New York City, where she covered various aspects of European economics.
