US and China to talk in Stockholm on trade with eye on Trump-Xi summit later this year

WASHINGTON AP When top U S and Chinese officers meet in Stockholm they are almost certain to agree to at least leaving tariffs at the current levels while working toward a meeting between their presidents later this year for a more lasting bargain deal between the world s two largest economies analysts say Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are set to hold talks Monday for the third time this year this round in the Swedish capital nearly four months after President Donald Trump upset global deal with his sweeping tariff proposal including an import tax that shot up to on Chinese goods We have the confines of a deal with China Trump noted Friday before leaving for Scotland Bessent recounted MSNBC on Wednesday that the two countries after talks in Geneva and London have reached a status quo with the U S taxing imported goods from China at and China responding with a tariff on top of tariffs prior to the start of Trump s second term Now we can move on to discussing other matters in terms of bringing the economic relationship into balance Bessent commented He was referring to the U S running a billion contract deficit last year The U S seeks an agreement that would enable it to export more to China and shift the Chinese financial market more toward domestic consumer spending The Chinese embassy in Washington noted Beijing hopes there will be more consensus and cooperation and less misperception coming out of the talks With an eye on a attainable leaders summit Stockholm could provide several answers as to the timeline and viability of that particular goal ahead of a accomplishable meeting between Trump and Chinese leader Xi Jinping The meeting will be pivotal in starting to set the stage for a fall meeting between Trump and Xi explained Wendy Cutler a former U S arrangement negotiator and now vice president at the Asia Society Agenda Institute Beijing will likely insist on detailed preparations before they agree to a leaders meeting In Stockholm the two sides are likely to focus on commercial announcements to be made at a leaders summit as well as agreements to address major irritants such as China s industrial overcapacity and its lack of control over chemicals used to make fentanyl also to be reported when Xi and Trump should meet Cutler reported Sean Stein president of the U S -China Business Council disclosed Stockholm could be the first real opportunity for the two governments to address structural adjustment issues including region access in China for U S companies What businesses will be seeking coming out of Stockholm would largely be the atmosphere how the two sides characterize the discussions They will also look for clues about a accomplishable leaders summit because any real deal will hinge on the two presidents meeting each other he explained Fentanyl-related tariffs are likely a focus for China In Stockholm Beijing will likely demand the removal of the fentanyl-related tariff that Trump imposed earlier this year commented Sun Yun director of the China effort at the Washington-based Stimson Center This round of the U S -China transaction dispute began with fentanyl when Trump in February imposed a tariff on Chinese goods citing that China failed to curb the outflow of the chemicals used to make the drug The following month Trump added another tax for the same reason Beijing retaliated with extra duties on a few U S goods including coal liquefied natural gas and farm products such as beef chicken pork and soy In Geneva both sides climbed down from three-digit tariffs rolled out following Trump s Liberation Day tariffs in April but the U S kept the fentanyl tariffs in addition to the baseline rate to which China responded by keeping the same rate on U S products These across-the-board duties were unchanged when the two sides met in London a month later to negotiate over non-tariff measures such as export controls on critical products The Chinese authorities has long protested that American politicians blame China for the fentanyl emergency in the U S but argued the root predicament lies with the U S itself Washington says Beijing is not doing enough to regulate precursor chemicals that flow out of China into the hands of drug dealers In July China placed two fentanyl ingredients under enhanced control a move seen as in response to U S pressure and signaling goodwill Gabriel Wildau managing director at the consultancy Teneo declared he doesn t expect any tariff to go away in Stockholm but that tariff relief could be part of a final arrangement deal It s viable that Trump would cancel the tariff that he has explicitly linked with fentanyl but I would expect the final tariff level on China to be at least as high as the - rate contained in the latest deals with Japan Indonesia Vietnam Wildau noted US wants China to dump less buy less oil from Russia and Iran China s industrial overcapacity is as much a headache for the United States as it is for the European Union Even Beijing has acknowledged the challenge but suggested it might be complex to address America s arrangement imbalance with China has decreased from a peak of billion in according to the Census Bureau But China has identified new markets for its goods and as the world s dominant manufacturer ran a global agreement surplus approaching trillion last year somewhat larger than the size of the U S overall business deficit in And China s emergence as a manufacturer of electric vehicles and other emerging technologies has suddenly made it more of a financial and geopolitical threat for those same industries based in the U S Europe Japan and South Korea Particular enterprises especially manufacturing enterprises feel more deeply that China s manufacturing capabilities are too strong and Chinese people are too hardworking Factories run hours a day Chinese Premier Li Qiang explained on Thursday when hosting European Commission President Ursula von der Leyen in Beijing Chosen people think this will cause specific new problems in the balance of supply and demand in world production We see this complication too Li stated Bessent also revealed the Stockholm talks could address Chinese purchases of Russian and Iranian oil However Wildau of Teneo declared China could demand certain U S guard concessions in exchange such as a reduced U S military presence in East Asia and scaled-back diplomatic endorsement for Taiwan and the Philippines This would likely face political pushback in Washington The Stockholm talks will be geared towards building a contract agreement based around Chinese purchase commitments and pledges of resources in the U S in exchange for partial relief from U S tariffs and export controls Wildau noted He doubts there will be a grand deal Instead he predicts a more limited agreement based around fentanyl That he announced is possibly the preferred outcome for China hawks in the Trump administration who worry that an overeager Trump might offer too much to Xi Associated Press writer Paul Wiseman contributed to this description Source