In midsummer Stockholm, a recent rain shower left the ground damp outside the Swedish government building, Rosenbad, as the air carried a cool freshness. It was in this setting that a conversation poised to impact the global economy quietly began. U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng walked side-by-side into the venue, commencing a closed-door negotiation that lasted over five hours.

Their core objective was clear and pragmatic: to extend the "truce agreement" on tariffs and export controls, which came into effect in May, for another 90 days, pushing it to November. This isn't just about a temporary reprieve; it's about creating crucial strategic breathing room for a potential meeting between Donald Trump and Xi Jinping, possibly around the U.S. presidential election.

Reuters' reporting sheds light on three key signals emerging from these talks:

Signal One: Truce Extension – Almost a Certainty?

While both sides remained tight-lipped about the negotiation details, several unnamed participating officials hinted that the "extension plan" was the central theme of this round of talks. This suggests that the U.S. and China appear to have reached a high degree of consensus on prolonging the trade truce. Currently, both parties are primarily focused on finalizing figures for specific "technical clauses," such as precise quotas for rare earth exports and licensing details for certain AI chips.

Signal Two: Focused Agenda, Not a Comprehensive Solution

This round of discussions remained "restrained," sticking closely to the three main lines of "tariffs, rare earths, and export controls." This scope is similar to previous high-level U.S.-China dialogues and did not touch upon deeper structural contradictions like China's industrial subsidies or U.S. investment restrictions. Clearly, both sides are treating this round of talks as an "pain-relief" exercise, rather than a comprehensive agreement to fundamentally resolve trade imbalances. This demonstrates pragmatism and restraint from both parties at the current stage.

Signal Three: High-Level Meeting – Warming Up?

If the truce agreement can be successfully extended until November, its timing will coincide perfectly with the rumored "Trump-Xi Jinping face-to-face" meeting in Europe and the U.S. during October-November. In other words, the secret talks in Stockholm might merely be setting the stage for a much larger drama that could unfold in the autumn.

What are the U.S. and China's Agendas?

Washington's Considerations: For the U.S. side, reliable supply of rare earths is a "hard target." U.S. officials have repeatedly emphasized the importance of "free flow of critical minerals." If China is willing to continue facilitating rare earth exports, Washington might subtly adjust the pace of its high-end chip bans, in exchange for political points from "balanced trade." This represents a pragmatic "step back to advance."

Beijing's Demands: From Beijing's perspective, the biggest goals remain tariff reductions and loosened export controls. Against the backdrop of China's slowing growth and sluggish external demand, even maintaining tariffs at a moderate level would be enough to give export-oriented companies some breathing room. Simultaneously, Beijing hopes the U.S. will provide clearer, more predictable licensing rules for AI chips, avoiding the uncertainty where companies fear "placing an order might lead to non-compliance."

The Next 90 Days: Risks and Key Milestones

• August 12: This marks the expiration date of the current truce agreement. If the Stockholm talks fail to be "finalized" as planned, three-digit tariffs could "snap back" into effect, posing significant risks to trade.

• After September: As the U.S. election approaches, Congress is expected to advance several China-related bills, including those on human rights and Taiwan issues. These could at any time disrupt the delicate pace of negotiations.

• October-November: If a meeting between the two leaders materializes, it will be a critical juncture to test whether the truce can be upgraded into a more substantive "mini-deal."

Corporate Compliance Reminders: Proactive Planning for Resilience

For all companies deeply involved in U.S.-China trade, the next 90 days are not just a breathing period, but a crucial time for strategic planning.

• Dual-Version Quotes: Before the extension plan is officially confirmed, it's essential to provide quotes with both "current tariffs" and "high tariffs" pricing. This helps mitigate contract performance risks due to sudden tariff increases and protects business interests.

• Secure Rare Earths and Critical Components: High-tech, automotive, and new energy sectors, which heavily rely on critical minerals and advanced components, must assess their inventory cycles. Sign volume commitment agreements with suppliers, especially for rare-earth-dependent components like permanent magnets and power chips, to ensure supply chain stability.

• Dynamically Track Export Control Lists: The U.S. frequently updates ECCN (Export Control Classification Number) codes and exemption clauses for AI chips and high-end production equipment. Importers and distributors must maintain a "version number" ledger to stay updated with the latest regulations and avoid misjudgment based on outdated lists.

• Transparent Information Disclosure: For listed companies and cross-border e-commerce businesses, it is advisable to include a separate "U.S.-China Tariff Uncertainty" section in financial reports or investor letters. This fully discloses relevant risks, helping to enhance corporate transparency and avoid accusations of insufficient disclosure of material risks.

Final Thoughts

The streets of Stockholm have returned to their quiet morning routine, but the outcome of this closed-door negotiation on tariffs and supply chains will dictate the rhythm of global manufacturing and consumer markets for the coming months. For companies deeply engaged in cross-border trade, the true challenge lies in: using these next 90 days of "short-term reprieve" to transform it into "long-term resilience." Only by proactively diversifying supply chains and strengthening compliance strategies can businesses navigate the next wave of volatility with composure.