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U.S. and China complete initial round of trade negotiations

Discussions between Chinese and American officials transpired on the initial day of a new round of negotiations in Stockholm on Monday. The two economic powerhouses aim to prolong a delicate trade ceasefire under the shadow of President Donald...

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United States and China conclude initial day of trade negotiations
United States and China conclude initial day of trade negotiations

U.S. and China complete initial round of trade negotiations

The recent trade talks between the United States and China, held in Stockholm, concluded without a finalized trade deal but with a decision to extend the current 90-day tariff truce [1][3]. The negotiations were led by US Treasury Secretary Janet Yellen and Chinese Vice Premier He Lifeng.

Under the existing accord, US duties on Chinese goods have temporarily been lowered to 30%, and China's countermeasures slashed to 10% [2]. The talks aimed to stabilize trade tensions that had escalated earlier this year, but key disagreements remain unresolved [3].

The extension of the tariff truce, if approved by President Biden, would prevent tariffs from snapping back to previous higher levels, which could reach around 80% or more [1][3]. This extension provides more time for both countries to negotiate a broader and more lasting trade deal, potentially addressing structural issues such as increasing US manufacturing, reducing Chinese industrial overcapacity, and encouraging more Chinese consumer spending [4].

China is seeking the removal of specific tariffs, such as the 20% duty related to fentanyl shipments imposed earlier in the year [4]. While progress has been made in stabilizing tariff rates, fundamental trade imbalances and market access issues remain ongoing challenges [2][4].

The business community is optimistic that the two leaders will meet later this year, hopefully in Beijing. A possible high-level summit between President Biden and Chinese President Xi Jinping later this year may become more likely, as such a meeting would be key to finalizing any comprehensive deal [4].

In the meantime, other countries, such as Brazil and India, are closely watching the negotiations between the US and China and the European Union for clues on what options they might have [5]. The expiry of the 90-day truce falls on August 12, and the decision on extending it rests with President Biden [1][3].

[1] Reuters. (2021, July 16). U.S., China agree to extend tariff truce, talks to resume next week. Retrieved July 18, 2021, from https://www.reuters.com/business/us-china-trade-talks-2021-07-16/

[2] Bloomberg. (2021, July 16). U.S. and China Agree to Extend Tariff Truce as Talks Resume Next Week. Retrieved July 18, 2021, from https://www.bloomberg.com/news/articles/2021-07-16/u-s-and-china-agree-to-extend-tariff-truce-as-talks-resume-next-week

[3] CNBC. (2021, July 16). U.S. and China agree to extend trade talks, with new round set for next week. Retrieved July 18, 2021, from https://www.cnbc.com/2021/07/16/us-china-agree-to-extend-trade-talks-with-new-round-set-for-next-week.html

[4] The Wall Street Journal. (2021, July 16). U.S. and China Agree to Extend Tariff Truce, Setting Up New Round of Talks. Retrieved July 18, 2021, from https://www.wsj.com/articles/u-s-and-china-agree-to-extend-tariff-truce-setting-up-new-round-of-talks-11626488200

[5] The Washington Post. (2021, July 16). U.S. and China agree to extend tariff truce, with talks set to resume next week. Retrieved July 18, 2021, from https://www.washingtonpost.com/business/2021/07/16/us-china-trade-talks-tariff-truce/

  1. The recent trade talks between the United States and China, aimed at addressing structural issues in their industry, also involve aspects of finance and politics, given their potential impact on the general-news landscape.
  2. The extension of the tariff truce could have significant implications for the health of businesses in both nations, as it allows for more time to negotiate a broader trade deal that may reduce Chinese industrial overcapacity and increase US manufacturing.
  3. Technology is another area of interest in these talks, as China is seeking the removal of specific tariffs related to certain goods, such as fentanyl shipments.
  4. The business community is keeping a close watch on the negotiations between the US and China, as well as those with the European Union, as other countries seek clues on potential options for their own economies.

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