Description: US Treasury Secretary, Scott Bessent, announced a planned trade meeting between Chinese and US trade representatives to take place in Stockholm next week. Bessent said the meeting would be used to ease trade tensions and potentially agree towards continuation of the tariff deadline which would effectively enlarge the negotiating period. The Treasury Secretary also stated that the US wanted to distance China from its export and manufacturing driven economy and reach a potential consensus on making it more consumer – based in order to surmount the alleged bilateral trade deficit. The announcement arrives as the US concluded trade deals with Vietnam, Indonesia, the UK and eased trade disputes with China on the export of rare earth minerals in exchange for access to the highly developed US tech industry. President Trump also announced that he might meet with President Xi in the near future as several venues for the meeting have been discussed such as the APEC (Asia – Pacific Economic Cooperation) summit and China’s 80th anniversary commemoration of the end of World War Two.
Impact: Trade negotiations between China and the US have progressed significantly since the start of the trade war, with both camps admitting to the bilateral economic codependency and agreeing to suitable trade concessions. The negotiations also encompass other global issues such as the direct geopolitical rivalry between China and the US, frictions between the countries on China’s support for Russia’s war in Ukraine, the fentanyl trade, and China’s consistent ambitions towards annexing Taiwan. Evident diplomatic backchannel talks are aiming to secure a potential trilateral leaders summit in Beijing, where Trump, Putin and Xi would meet to discuss the resolution of several global issues such as the tariff war, and the war in Ukraine. The US and China are expected to resolve their trade dispute in the next couple of months depending on the progress of the bilateral trade talks, which have so far seen both China and the US showing flexibility and adapting to the newly created geoeconomic reality.