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Scott Bessent anticipates the US and China achieving a common ground in their trade talks

Scott Bessent anticipates the US and China achieving a common ground in their trade talks

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On Monday, July 28, Jamieson Greer, a US Trade Representative under the Trump administration, expressed cautious optimism about ongoing trade talks between the United States and China. While he welcomed the willingness of both countries—longtime rivals—to engage in negotiations, he tempered expectations by suggesting that any agreement reached this week would likely be modest rather than a sweeping breakthrough.

Greer emphasized that he did not anticipate a major deal, noting that his role involved closely monitoring the implementation and progress of trade agreements.

The latest round of talks took place in Sweden, where senior officials from both nations convened. This marked the third high-level engagement between the US and China since the Trump administration introduced tariff threats aimed at US trading partners.

Scott Bessent anticipates the US and China achieving a common ground in their trade talks 

The US and China are facing a severe trade war that Trump’s tariff policies have ignited. Trump imposed threatening tariffs on Chinese goods, and the country responded with retaliatory tariffs on US goods. The main agenda of the recent US-China trade talks is to address the trade war that nearly caused a significant economic crisis.

Therefore, to end the trade war, the two countries are expected to discuss their terms to extend the 90-day break they had set on the tariffs. Notably, the due date for the pause on the tariffs is set to expire on  August 12.

The US and China decided to hold the trade talks in May when US President Donald Trump and Chinese President Xi Jinping met in Switzerland.

Despite Greer’s speculations, Scott Bessent, US Treasury Secretary, has demonstrated optimism on the US-China trade deal.  Bessent anticipated that this week’s trade talks would promise that the two nations would reach a common ground and extend the tariff break.

This came after the US Treasury Secretary expressed that they will be working out what is likely to be a tariff pause extension in an interview. He further pointed out that the US and China have demonstrated a solid link-up.

Still, Greer sticks to his speculations of a minor outcome in the trade talks. He, however, stated that what the US is after in these talks is to move in a positive direction. “Our discussions with the Chinese are always friendly and helpful,” Greer added.

The US Trade Representative further stated that this marked the third trade talk between the two nations in three months. Seeing the consistency in the talks, Greer mentioned that this was a good sign that the US will achieve its desire to move in a positive direction.

Greer highlights Trump’s satisfaction with his tariff system 

Apart from China, several US trading partners have tried to conduct trade talks with the US before the August 1 tariff deadline takes effect. Examples of these trading partners include the EU and Japan.

Greer mentioned that the US cannot strike any further deals regarding the trade talks.

He stated that they do not see the need to strike further trade deals even in scenarios where other countries are eager to engage in talks with the US. According to Greer, the US aims to strike deals to enhance trade.

However, he brought up the point that Trump prefers to impose tariffs the way they are rather than make deals, echoing his previous remarks that he was pleased with his tariff system.

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US and China expected to extend tariff truce by 90 days

US and China expected to extend tariff truce by 90 days

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Beijing and Washington plan to tack another 90 days onto their trade war truce as the two countries prepare to begin another round of negotiations in Stockholm on Monday, the South China Morning Post (SCMP) reports, citing sources familiar with the matter.

This third round of high-stakes negotiations represents the latest attempt by the two countries to stabilize one of the world’s most important economic relationships. It builds on previous talks in Geneva and London, which were aimed at checking the rapid advance of tariffs and laying a foundation for a broader de-escalation of trade tensions.

According to the SCMP article, the US and China will commit not to levy new tariffs or take aggressive actions during the 90-day proposed extension. The announcement indicates that both sides want to keep talking and avoid a fresh flare-up in the tensions roiling global markets for years.

The White House has not publicly confirmed the planned truce extension, and the US administration was not immediately available for comment.

Beijing demands tariff review on fentanyl chemicals

A key new hiccup to these talks is that they extend far beyond traditional trade issues: They also involve threats to restrict exports of fentanyl, a potent and deadly synthetic opioid.

The Chinese delegation will also demand during the discussions with US officials that the Trump administration remove tariffs on components of a chemical used to make fentanyl, according to people familiar with the matter.

The synthetic opioid has been a leading driver of overdose deaths in the United States. America has blamed Chinese suppliers for adding to the crisis by shipping out precursor chemicals. In retaliation, tariffs were placed on certain chemical imports that were suspected to be in the fentanyl supply chain.

Beijing, though, says that these tariffs set back the cooperative fight to reduce illegal drug flows. Chinese officials are also likely to argue for a more collegial approach, including technical collaboration and intelligence sharing, rather than punitive tariffs.

Although the fentanyl crisis has been a significant focus for the US regarding domestic policy, it is uncertain whether the Biden trade team would agree to modify the tariff approach in the space at a time of domestic election, including amid widespread frustration with Chinese policies.

US and China pause new tariffs for 90 days

If the 90-day cease-fire that was reported comes to pass in Stockholm, it would mark a deliberate halt in one of the longest trade wars of modern times.

The US and China have levied tariffs on more than $700 billion worth of each other’s goods since 2018. The trade war disrupted supply chains worldwide, affected the agriculture and technology industries, and changed how global multinationals arrange their operations.

An interim pause, analysts say, would give businesses that have been ensnared in the crossfire for years a chance to breathe. It would also allow both sides to work on thornier long-term issues like intellectual property protection, digital trade, and forced technology transfers.

The 90-day period is not a permanent solution but a window of opportunity. Its success will depend largely on the political will of both the United States and China to move the negotiations forward or risk renewed tensions.

The timing of the Stockholm meetings is also crucial. The United States is heading into a ferocious election cycle, and neither side may want to appear as if it is soft on trade, for China, where a slowing economy and increasing pressure from domestic industries are probably fueling a more practical approach to diplomacy.

Although there is optimism about the meeting, experts warn that many core structural issues have yet to be resolved. The truce over tariffs might help defuse tensions, but it is anything but a permanent solution.

What unfolds this week in Stockholm could decide whether the world’s two biggest economies are on a path to rekindled cooperation — or merely deferring the next round of confrontation.

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