President Donald Trump is advancing efforts to restructure international trade by announcing new mutual tariffs on imports from dozens of countries ranging from 10% to 41%.
On Thursday, the White House issued a statement entitled “More Changes to Mutual Tariff Rates.” There, around 69 trading partners and their respective “adjusted” tariff rates were listed.
These are changes to tax changes since the day Donald Trump called the “liberation day,” the tariffs announced on April 2 (and then suspended until August 1st). Prices have been lowered in most countries, but not all. Most of the new tariffs will come into effect on August 7th.
Imports from around 40 countries face a new 15% rate of goods exported to the US, while products from other countries are hit by higher duties. The UK and Australia pay 10%.
One notable exception from Trump’s latest tariff list is China, the third largest trading partner in the United States. So, what is the current state of play between the two countries?
How about trade negotiations between the US and China?
Top US and China officials disagreed to extend the 90-day suspension on tariffs on Tuesday during the latest talks held in Stockholm, Sweden.
The suspension update, which is due to expire on August 12, will ultimately be up to Trump, said U.S. Treasury Department’s Scott Bescent.
The talks held at Rosenbad, the government’s seat on the Swedish Prime Minister’s Office, were aimed at mitigating a new trade spat between the two largest economies in the world.
The latest meeting attended by Bescent and the Deputy Prime Minister Lifeng concluded just two days after Trump announced a new trade deal with the European Union.
It was the third meeting between the US and China since April, at which point they had been slapped each other with tariffs exceeding 100% on the escalating trade war.
On May 12, the two agreed to a 90-day suspension of tariffs in Geneva, easing the expensive logjams that overturned trade. During the suspension, US tariffs fell from 145% to 30%, while Chinese duties fell from 125% to 10%.
However, if new trading contracts are not in place, global supply chains could face new disruptions if tariffs between us and China reboot at double-digit levels and amount to a bilateral trade embargo.
What happened at the Stockholm Conference?
After the meeting, China’s Deputy Commerce Minister Li Chenggang said that both sides “are fully aware of the importance of protecting stable and healthy China-US trade and economic ties.”
He told Chinese media that both sides held “candid and constructive interactions.”
On his part, Bescent told reporters at a briefing Tuesday that the US had built up momentum with the recent US agreement with Japan and the EU. He remained optimistic about China.
“To curb that rhetoric, the meeting was very constructive. We didn’t give you sign-off,” he said.
“No agreement has been reached until we talk to President Trump,” Bescent emphasized.
The Treasury Secretary and US trade representative Jamieson Greer were short Trump on Wednesday about the Stockholm debate, he added.
Bessent also said China could face high tariffs if Beijing continues to buy Russian oil, given the secondary tariff laws on approved Russian oil.
Similarly, the US recently announced an unspecified penalty for India’s purchase of Russian oil, in addition to a 25% tariff on Indian exports.
What are the central issues of trade talks?
The chips used in technology exports, particularly artificial intelligence, are understood to have been at the heart of this week’s talk. In particular, US security officials raised concerns that high-tech American semiconductor chips could be used by Chinese military.
In April, Trump was poised to block exports of Nvidia’s H20 chips, designed to comply with Biden-era curbs. But Trump reversed the course following a direct appeal from Nvidia CEO Jensen Huang.
In preparation for this week’s talk, the UK’s Financial Times newspaper reported that Washington has freezing restrictions on technology sales to China to facilitate negotiations and avoid retaliation from Beijing in the form of rare earth mineral export restrictions, as happened in May.
Rare Earth is a group of 17 elements essential to a large number of manufacturing industries, from automotive parts to clean energy technology to military hardware. It is also a central issue in trade talks.
China has long dominated the mining and processing of rare earth minerals, as well as the production of related components such as rare earth magnets.
Since Donald Trump returned to the White House, China’s holdings to industry have been a key concern for US trade representatives.
What was the state of US-China trade before the recent ceasefire?
For years, Trump has criticised Beijing for what he considers unfair trade practices: import allocations, government subsidies and tax credits. He even argues that the US trade deficit with China, which snowballed to $20 trillion between 1974 and 2024, constitutes a national emergency.
He gave China an exception when Trump suspended mutual tariffs in dozens of countries on April 9th. Beijing retaliated with its own import taxation.
The TIT-FOR-TAT exchange quickly snowballed to an eye-opening sum. By April 11, US tariffs on Chinese products had reached 145%, but the duties of US products entering China had risen to 125%.
Tensions were rejected in May when Bescent and his Lifeng agreed to a ceasefire in which each tariff was reduced by 115 percentage points for three months.
For now, US duties for Chinese products are set at 30%, while US Chinese tariffs have fallen to 10%.
What happens next?
This week’s speech could pave the way for a potential meeting between President Donald Trump and Chinese President Xi Jinping later in the year, but on Tuesday, Trump denied not getting in his way.
For Thomas Sampson, a professor of economics at the London School of Economics, face-to-face meetings “can be important.” Similarly, it could be a “grip and grin-style summit where nothing substantial is discussed,” he told Al Jazeera.
Sampson added that in addition to the fact that China has been “a target of Trump for a long time,” the US-China negotiations with other Asian countries are more complicated as China has grasped rare earth minerals.
For now, Sampson said he thinks “the mood around the story (in Swedish) seems more positive than earlier this year. His expectations are against a “more suppressed trade war” than before, if it reopens.
On Friday, White House spokesman Caroline Leavitt said trade talks with China “moves in the right direction” and that Washington remains “direct communication” with Beijing.
What other trade transactions have Trump closed in the last few weeks?
In addition to Trump’s Thursday’s tariff blitz, the latest talks with US China come after Washington made deals with both the EU and Japan last week.
Last Sunday, Trump and European Commission’s Ursula von der Leyen announced a trade deal, ending a month-long honor between the two economic giants.
The EU has accepted a 15% tariff on most exports, but the average tariff rate for the bloc on US goods is below 1% once the transaction is enacted.
Brussels also said it would purchase $7500 billion in American energy products, along with its existing commercial agreements, and invest an additional $600 million in the United States.
French Prime Minister François Bailloux said the EU surrendered to the threat of Trump’s trade and was deemed an “dark day” for the EU on Sunday.
Elsewhere, the US has also attacked tariff transactions with South Korea, Indonesia, Vietnam and the Philippines.
