US-China to resume tariff negotiations following Trump’s Philippines trade deal

A new round of high-level US-China trade negotiations is set for July 28–29 in Stockholm, aiming to extend a fragile 90-day truce and avoid the return of punitive tariffs. But this isn’t a story of progress—it’s a story of divergence. Washington seeks rebalancing through sector-specific concessions and managed trade terms. Beijing, meanwhile, remains fixed on preserving its state-supported industrial blueprint while gaining targeted market access. The Stockholm talks may buy time. But they do not close the gap between these incompatible economic worldviews.

This is not a return to the Trump-era trade war. It’s something subtler—and more strategic. The US is using tariffs not just as a punishment tool but as a structural wedge. Each new bilateral agreement—from the Philippines to Indonesia—shows a shift in Washington’s approach: transactional carve-outs to build leverage against Beijing. China, for its part, is fighting on multiple fronts—easing rare earth restrictions here, pushing back on overcapacity claims there—without conceding the central role of its industrial policy.

That’s the real fault line. And it won’t be bridged in Stockholm.

What set this stage? The US and China remain the world’s largest trading partners, but their economic models are diverging faster than ever. The US wants reduced dependency on Chinese supply chains. China wants to maintain high-value exports while upgrading its consumer base—without abandoning its subsidy-backed manufacturing engine.

In May, Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng launched a temporary thaw in Geneva and London, dialing back mutual triple-digit retaliatory tariffs. The immediate goal: prevent a full collapse of trade flows while higher-stakes disputes—semiconductors, industrial overcapacity, rare earth controls—remain unresolved.

The key concessions so far include:

• Beijing ending its rare earth metals export ban to the US.
• Washington resuming sales of advanced semiconductor materials, software, and aircraft engines to China.
• A mutual pause on tariff escalation—pending the outcome of talks.

But this is not détente. It’s managed friction. The 90-day window was never a solution; it was a stalling tactic. And the countdown is nearly up.

At the heart of the Stockholm meeting is a mismatch of trade objectives.

The US wants structural rebalancing. That includes:

• Reining in Chinese overproduction in steel, EVs, and solar panels.
• Curtailing state subsidies that create global price distortions.
• Redirecting Chinese growth toward domestic consumption.

China insists these criticisms are ideological—and ignores the depth of state intervention in its industrial sectors. It argues its exports reflect scale and innovation, not distortion. Privately, Beijing seeks to preserve its strategic manufacturing capacity even as it lifts select restrictions to keep negotiations moving. This makes Stockholm less of a deal-making summit and more of a reputational chess match.

US negotiators—including USTR Jamieson Greer and Commerce Secretary Howard Lutnick—will push for visible shifts in China’s manufacturing mix. Beijing will likely offer symbolic adjustments while defending its macro framework. Both sides know the tariffs could snap back—145% from the US, 125% from China—if no extension is agreed.

That’s why Stockholm is not just a trade meeting. It’s a test of strategic patience.

Even as Stockholm looms, the US has already signed new tariff deals with the Philippines and Indonesia. The terms? A flat 19% US tariff on imports from both countries, in exchange for broad market access for US goods and partial tariff rollbacks. Indonesia agreed to eliminate most non-tariff barriers entirely.

This is not economic generosity. It’s chessboard positioning. The US is building a ring of compliant trade allies to offset Chinese leverage. Every new bilateral deal reduces China’s margin for negotiation. Even Japan—despite domestic political friction—is reportedly close to a new trade framework with the US.

For Beijing, this widening circle of US-aligned trade partners signals a broader decoupling effort—one not led by ideology, but by incentives and penalties. Stockholm is not just bilateral; it sits within a triangulated system of pressure.

A less publicized but no less strategic dimension of the talks is energy. Bessent has made clear that secondary sanctions are on the table—especially for nations that continue buying sanctioned Russian oil. China is in the crosshairs. The US Senate is advancing legislation to impose 100% tariffs on goods from any country purchasing Russian crude.

This is no longer just trade. It’s energy diplomacy, sanctions enforcement, and industrial policy rolled into one. For Beijing, the risk isn’t just higher tariffs—it’s entanglement in a broader Western effort to isolate Russian resource flows. For US negotiators, it’s an opportunity to extract commitments under the guise of trade policy.

If Stockholm produces any alignment, it may be in the form of non-binding language around Russian oil purchases—language that allows both sides to claim diplomatic progress without giving ground.

This phase of US-China trade engagement is not about returning to open globalism. It’s about managed fragmentation. Each side is entrenching its economic logic—state-led versus market-managed—and using selective openness to blunt strategic pressure.

The Stockholm talks will likely yield an extension of the truce. But the core divergence remains: the US wants structural rebalancing, while China wants tactical flexibility. This isn’t convergence. It’s competitive coexistence—on borrowed time.

For business strategy leads, the lesson is clear. Supply chains, market access, and trade privileges are being recoded through national interest. The post-global rules no longer apply—and Stockholm won’t change that.