Dear Reader,
On July 28, China and the United States held their third round of “trade talks” in Stockholm—though by now, these discussions seem to have drifted far beyond the realm of commerce alone. Both sides described the Stockholm talks as “constructive” and agreed to further extend the mutual tariffs, echoing outcomes from previous rounds in London and Geneva. So, you might be wondering:
Was this round just another diplomatic rerun?
What lies beneath the calm surface?
Was this “trade talk” really just about trade?
What and Why topics beyond the commercial field were involved?
Are there clues pointing to the future trajectory of the “trade war”—and perhaps more?
We’re just as curious as you are.
So we turned to Chinese experts to find out what’s being said inside China. Their insights might just offer a fresh perspective on this complex saga.
Happy reading!
Yours sincerely, Editors of BeijingOpinion.
Compared to the previous two rounds, this round of Stockholm talks has received significantly less attention within China. Chinese citizens and business communities have already mentally prepared for a prolonged trade confrontation. Whether it's the second, third, or future rounds of negotiations, China’s commercial sector has gradually adapted. The recent stability in China’s stock market reflects this sentiment. While the stock market may not fully mirror economic performance, it is certainly a barometer of public expectation—and it signals a calm and composed attitude toward the latest dialogue.
Encouragingly, over the past two months—from Geneva in May to London in June and now Stockholm in July—senior representatives from China and the U.S. have met regularly, demonstrating the sense of responsibility shared by major powers. Notably, the Trump administration has recently issued a series of conciliatory signals, including statements on the Philippines, restrictions on Taiwan's leadership transits, and approval of Nvidia’s H20 chip exports to China. These gestures suggest Trump aims to secure limited concessions from China in exchange for setting the stage for his upcoming visit.
Today, Trump publicly acknowledged receiving an invitation to visit China. All signs point to Stockholm being a crucial, yet not decisive, node in the broader trade negotiation process. It cannot resolve all U.S.-China trade issues, but monthly engagements like this help ease tensions, which is a positive development.
In parallel, we’ve seen China’s crude oil imports from the U.S. drop to near zero. The U.S. has also warned China to refrain from importing oil from Russia and Iran, threatening punitive tariffs. The intent is clear: on the surface, it's about energy revenues—the U.S., as the largest oil exporter, stands to lose billions annually. At a deeper level, it’s about geopolitical competition. For Washington, China’s continued imports from these nations are seen not just as economic moves, but as symbolic support for America’s strategic rivals.
Some Americans even speculate that without China’s oil purchases, Russia would have collapsed—this is delusional. It wrongly assumes China is siding with Russia in the Ukraine conflict or backing Iran in its rivalry with Israel. In reality, China’s trade with Iran and Russia is legitimate, sovereign-state-to-state commerce and should not be dragged into bilateral trade talks with the U.S.
Bringing third-party issues into the mix only complicates already delicate trade negotiations. While the U.S. may use Russia and Iran to play a “political card” domestically, China must stay firm and confident. With a manufacturing output 2 to 2.5 times that of the U.S. and similarly strong energy infrastructure, China has no reason to concede. The AI revolution has further positioned China and the U.S. as the only true global tech competitors. A lasting contest requires a long-game mindset.
Against a backdrop of global economic restructuring and heightened geopolitical risks, the latest U.S.-China trade talks in Stockholm conveyed a tone of “differences, pressure, and pragmatism.” Although no landmark agreements were reached, the talks signalled a continuation of communication and a willingness to be pragmatic.
Discussions centered on tariff extensions, rare earth supplies, overcapacity, and national security concerns. Notably, the U.S. raised China’s oil imports from Iran and Russia as a negotiation issue, even threatening secondary sanctions—highlighting the increasing intersection of trade policy with strategic security considerations. Future trade talks may go beyond tariffs and market access to include broader national interests.
Overall, the Stockholm dialogue serves as a continuation of strategic engagement while offering a potential stabilizing point for bilateral relations. Structural tensions remain unresolved, but space still exists for crisis management and cooperation on specific issues—bringing some reassurance to the markets.
First, the Stockholm talks were candid, particularly on macroeconomic issues. However, the U.S. continued to exert maximum pressure, accusing China of overcapacity and buying oil from sanctioned states—moves that clearly overstep trade boundaries.
Second, both sides may agree to extend the current tariff truce by another 90 days, though the decision largely rests with Trump. Third, a question arises: Can the U.S. and China explore a fourth model of trade negotiation? To date, U.S. trade tactics can be grouped into three models:
U.S.–U.K.: 10% tariffs;
U.S.–Japan/EU: 15% tariffs plus investment-purchase arrangements;
U.S.–Vietnam: 20% tariffs and 40% re-export taxes.
In theory, Chinese firms could invest in the U.S., but Washington’s protectionism has blocked such avenues, especially in high-tech. Real openness must be reciprocal. Moreover, while the U.S. maintains high tariffs on China, it is worth noting China has assisted in managing fentanyl demand on the U.S. side. Imposing a 20% fentanyl-related tariff is unjustified and should be lifted. Trade worth over $700 billion annually shows deep mutual dependency—not coercion. The real task is to build a new model through equal consultation.
Amid a global overhaul of economic governance, the talks helped establish a “shock absorber” in U.S.-China competition through institutionalized dialogue mechanisms. Building on momentum from Geneva and London, the Stockholm round featured high-level, constructive, and frank exchanges. While the U.S. frames its strategy around "de-risking"—in reality aiming to build tech barriers via allied coordination—China insists on a path of "stable, healthy development," advocating coexistence of distinct economic systems.
Crucially, both parties reaffirmed their commitment to maintaining dialogue mechanisms and regularly exchanging views on key issues. This represents significant progress in rebuilding high-level communication after a tense period and lays a foundation for future cooperation and dispute management. It also signals that systemic competition does not preclude partial collaboration—global fragmentation is not the answer.
During the talks, U.S. Treasury Secretary Bessent urged China to "rebalance" its economy—shifting away from export and manufacturing reliance toward consumption-led growth. The aim is to reduce China’s trade surplus and overcapacity, both of which are seen as damaging to American industries. Superficially, this aligns with China’s internal goals to boost domestic consumption and reform supply chains—initiatives dating back to the 12th and 13th Five-Year Plans. However, the fundamental divergence lies in approach: The U.S. focuses on its own benefit, using tariffs and tech controls, while failing to appreciate the complexity of China’s economic transition.
China, for its part, insists on autonomous transformation, balancing growth and employment. It refuses conditional concessions. Moving forward, China must focus on raising incomes and boosting consumer confidence while avoiding abrupt deindustrialization that could lead to job losses or instability.
Three takeaways from the July 30 Stockholm talks:
Tariff Freeze Signals Tactical Pause – Both sides agreed to extend current tariffs, effectively locking in the status quo. This buys time for both economies to address inflation and employment challenges.
U.S. Still Pursuing “Easy First” Strategy – Washington has secured tariff concessions from the EU, Mexico, Vietnam, and Japan. With only a few holdouts like India and Brazil, the U.S. may soon tighten rules of origin or minimal processing clauses to further restrict China.
Supply Chain Competition the Next Battleground – With tariff tools losing effectiveness, the U.S. is pivoting to reshoring. Senator Rubio has pushed the “America First in the Americas” initiative, and the forthcoming “Americas Act” will likely include incentives to relocate U.S. operations from China to the Western Hemisphere. This could make Latin America the core of U.S. supply chain policy.
Although Russia is not directly involved in the U.S.–China trade negotiations, the ripple effects of their interaction are evident:
Energy Cooperation Impact – U.S. Treasury Secretary Bessent indicated a plan to impose 100% secondary tariffs on countries importing sanctioned Russian oil. Yet, China’s top trade negotiator Li Chenggang reaffirmed China’s right to maintain reciprocal tariffs. This shows China remains firm on energy security and sovereignty, despite engaging in U.S. dialogue.
Global Trade Shift and Russia’s Marginalization – Since July, the U.S. has signed new tariff deals with major economies including Vietnam, Indonesia, the Philippines, and the EU. This latest wave of tariff realignment could further squeeze Russia’s presence in Asian markets and complicate its participation in global payment systems—potentially pushing Russia even further to the margins of global trade.
The views don't necessarily reflect those of BeijingOpinion.