US and China Expected to Extend Tariff Truce by 90 Days at Third High-Level Talks

The South China Morning Post (SCMP), citing sources from both countries, reported on the 27th that the United States and China are expected to agree to extend the tariff truce by an additional 90 days during the high-level trade talks scheduled to be held in Stockholm, Sweden on the 28th and 29th (local time).

According to SCMP, the two countries plan to discuss extending the period for reduced ultra-high tariffs at the third round of high-level trade talks, which will be attended by U.S. Treasury Secretary Scott Besant and Chinese Vice Premier He Lifeng. Citing sources, SCMP reported that rather than finding concrete breakthroughs on key issues, both sides are expected to simply state their respective positions.

Qingdao Port, Shandong Province, China. Photo by AFP

One source stated that the two countries will agree not to impose additional tariffs on each other or escalate the trade war by other means during the additional 90-day grace period.

Previously, on the 22nd, Secretary Besant suggested an extension of the ultra-high tariff suspension during an interview with Fox Business, saying, regarding the third round of high-level trade talks between the U.S. and China, "We will resolve what is likely an extension." He also stated in a CNBC interview on the 21st that the U.S. would raise the issue of China's purchases of Russian and Iranian oil during the talks. On the 14th, U.S. President Donald Trump said that if Russia does not agree to a ceasefire with Ukraine within 50 days, the U.S. could impose a 'secondary tax' of around 100% on countries trading with Russia.

According to three sources, while the first and second rounds of high-level talks held previously in Geneva, Switzerland, and London, United Kingdom, focused on easing tensions, the Chinese side plans to pressure the U.S. side on the issue of fentanyl-related tariffs during this meeting. President Trump had imposed a 20% tariff on China in March, claiming that China had not taken sufficient measures to prevent the inflow of fentanyl into the United States.

The U.S. and China, which had been engaged in a triple-digit tariff war, agreed during the Geneva talks in May to lower tariffs by 115 percentage points each for 90 days. This measure is set to expire on August 12. If the grace period is extended by an additional 90 days, the tariff truce is expected to continue until November.

President Trump stated in the evening, ahead of his meeting with European Commission President Ursula von der Leyen in Scotland, United Kingdom, that the U.S. was "very close to an agreement with China."

The Peterson Institute for International Economics (PIIE) assessed that the average U.S. tariff rate on Chinese imports currently stands at 51.1% with the grace measures applied. This figure includes the base tariff (10%) and the fentanyl tariff (20%) imposed during President Trump's first term, as well as all other China-related tariffs.