The Stockholm summit follows mounting urgency in Washington to finalize trade agreements before President Trump’s August 1 tariff deadline with dozens of other countries. While many partners have struck 15% tariff deals with the U.S., China faces higher rates, creating uncertainty for global markets.

Negotiators are also addressing U.S. complaints about Chinese fentanyl precursor exports. Although Beijing tightened controls on two key chemicals last month—a move praised by Trump—the U.S. remains skeptical. Bessent called the current pause “likely to be extended,” but warned that talks remain complex and depend on further Chinese action.

Another flashpoint is Beijing’s continued purchase of oil from sanctioned states like Russia and Iran. U.S. officials have urged China to scale back such imports, but Chinese state media and academics signaled resistance, accusing Washington of economic coercion.

Tariffs, Tech, And Trump-Xi Summit Loom Large

The talks may also pave the way for a future Trump-Xi summit, possibly in South Korea later this year. Xi invited Trump and First Lady Melania Trump to visit China, though no date is confirmed.

On technology, the U.S. has signaled flexibility by easing some semiconductor export restrictions, while Beijing resumed rare-earth magnet shipments and suspended an antitrust probe against DuPont China.

Despite these gestures, Commerce Department officials have been instructed not to impose new penalties during talks, according to a Financial Times report. Still, both sides remain wary. China wants the U.S. to end its “blame game” on fentanyl and provide evidence of trafficking; the U.S. demands deeper compliance with UN controls.

U.S. business leaders like Sean Stein of the U.S.-China Business Council view the fentanyl issue as a potential breakthrough: “Lowering those tariffs opens the door to more agricultural, energy, and auto trade.”