Bessent stated that trade relations with China are currently in a positive state, and the meetings are scheduled for Monday and Tuesday in Stockholm.

He expressed optimism about the progress made, saying that discussions have reached a new, constructive phase, enabling substantial work now that trade tensions have stabilised at a manageable level.

Swedish Prime Minister Ulf Kristersson confirmed on social media that Sweden will host the talks early next week, highlighting the positive step of both nations seeking mutual understanding.

China’s embassy in Washington has yet to confirm details regarding the planned discussions or Chinese representatives.

Since mid-May, Bessent has held two meetings with Chinese Vice Premier He Lifeng in Geneva and London to develop and refine a temporary trade truce, which reduced the risk of escalating tariffs that could have severely disrupted trade between the two largest economies.

Previous talks also involved U.S. Trade Representative Jamieson Greer, Commerce Secretary Howard Lutnick, China’s Commerce Minister Wang Wentao, and chief trade negotiator Li Chenggang.

Among agreements reached so far, China has lifted its export ban on rare earth metals and magnets to the U.S., while the U.S. has resumed shipments of semiconductor design software, production materials, commercial aircraft engines, and other products to China.

The two sides initially set a 90-day timeline to address more complex issues, including U.S. concerns about China’s state-driven and subsidised export model, which has led to excess manufacturing capacity and an influx of inexpensive goods into global markets. China rejects claims of subsidies, attributing its export success to innovation.

If no deal or extension is reached, tariffs could return to previous high levels of 145% for the U.S. and 125% for China.

Bessent said the Stockholm meetings will likely focus on extending the deadline and tackling other issues, such as encouraging China to reduce its heavy dependence on manufacturing and exports.

He hopes China will scale back on overproduction and shift toward developing a consumer-based economy.

Additionally, Bessent plans to address concerns over China’s ongoing purchases of Russian and Iranian oil, despite sanctions, and its support for Russia’s military actions in Ukraine.

He noted bipartisan backing in the U.S. Senate for legislation proposing 100% tariffs on goods from countries, specifically China and India, that continue buying Russian oil.

Bessent emphasised the importance of cooperation with European partners, urging them to enforce strong secondary tariffs on Russian oil imports.

He also mentioned upcoming trade agreements with other countries, including Japan, despite recent political challenges there.

While tariffs are expected to revert to levels seen in early April from the current 10%, negotiations on trade deals will continue.

The talks, entering their second day, come just weeks after a preliminary trade agreement was reached in Geneva. That deal had briefly lifted investor sentiment, but new accusations from Washington including claims that Beijing is intentionally restricting exports of critical raw materials have since renewed tension between the two superpowers.

The latest round of discussions centers on strategic materials such as rare earth elements, which are essential to global industries including automotive manufacturing, aerospace, semiconductors, and defense technology. China controls over 60% of global rare earth supply and has increasingly used export curbs as a tool of economic statecraft, citing national security.

Background: From Tariffs to Tech Controls

Since 2018, U.S.–China trade relations have been marked by tariff wars, intellectual property disputes, and tech restrictions, resulting in hundreds of billions in disrupted trade. The Trump administration initiated tariffs on Chinese goods, citing unfair trade practices, while the Biden administration has largely continued pressure shifting focus to semiconductors and advanced technologies.

The Geneva accord last month was seen as a rare moment of cooperation, involving partial tariff rollbacks and promises of transparency in tech-related trade. However, U.S. officials now say that Chinese compliance has been inconsistent, especially in the area of export licensing and customs clearance for critical goods.

“We remain committed to fair and reciprocal trade,” said a senior U.S. trade official before the London talks resumed. “But we are deeply concerned about non-transparent export controls that risk undermining the global economy.”

Beijing, for its part, has accused Washington of attempting to “contain China’s rise” through unilateral export bans on chips and chipmaking equipment, including measures targeting companies like Huawei, SMIC, and several Chinese AI firms.

Global Stakes: Supply Chain Risks and Market Jitters

The stakes are high. Disruptions in rare earth supplies could reverberate across industries, particularly electric vehicles (EVs), green energy infrastructure, and military-grade systems. As countries push toward digital and green transitions, the ability to secure raw materials has become a geopolitical flashpoint.

Markets are watching closely. After the Geneva deal, indexes rose on hopes of a thaw. But continued friction particularly over strategic exports and tech sovereignty  could spell deeper divides and renewed uncertainty.

A breakthrough in London would not only mark a diplomatic win, but potentially ease pressure on global inflation, manufacturing costs, and geopolitical risk indices.

Negotiators are expected to conclude a joint statement by Wednesday.