The United States and China are pushing ahead with sensitive trade negotiations in Stockholm, seeking to extend a fragile 90-day tariff truce set to expire in early August. U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are leading the third round of talks in under three months as both sides work to preserve economic stability and political face.

Negotiators are working to resolve contentious matters, including U.S. export controls, levies related to China’s role in global fentanyl trafficking, and Beijing’s continued purchases of sanctioned oil from Russia and Iran. These thorny issues have dogged bilateral trade for years but are now being addressed under the current pause in tit-for-tat tariffs.

Bessent said he expects “likely an extension” to the existing truce and added, “I think trade is in a very good place with China.” U.S. tariffs targeting other economies are still scheduled to begin August 1, making the outcome of these talks pivotal.

Summit Hopes and Political Risks

Though no formal summit is scheduled, the meetings could lay the groundwork for a Trump-Xi encounter later this year, possibly on the sidelines of the APEC summit in South Korea. Chinese President Xi Jinping has already invited Trump to visit China with First Lady Melania Trump, though no date has been confirmed.

Trump, speaking from Scotland, reiterated that he is not seeking a summit but may accept Xi’s invitation. He faces mounting pressure from hardliners in Washington who accuse him of yielding too much in pursuit of a legacy-defining trade pact.

Taiwan Implications

The geopolitical ripple effects are already being felt. Taiwan’s President Lai Ching-te reportedly canceled a transit through the U.S. after the Trump administration failed to approve his New York stopover—interpreted by some analysts as a move to appease Beijing during the negotiations.

Veteran observers say this trade truce and its fallout reveal the Trump administration’s balancing act: securing economic wins while avoiding escalatory confrontations with China.