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U.S. and China near trade deal as Stockholm talks aim to avert August tariff spike

By isabelle // 2025-07-28

• U.S. and China face a critical July 28 meeting in Stockholm to finalize a trade deal before August 12 tariffs spike, risking frozen trade between the world’s top economies.
• Trump claims the nations are "very close to a deal," but experts warn against trusting China due to its history of broken promises and economic coercion.
• China holds leverage with its 80% rare earth supply dominance, having previously weaponized exports, while demanding U.S. tariff cuts and looser tech export controls.
• Negotiations include potential concessions like a Trump-Xi summit and increased Chinese purchases of U.S. goods, but critics dismiss these as manipulative tactics.
• Without structural reforms, any deal may only delay an inevitable economic clash, as China continues exploiting U.S. supply chain vulnerabilities.

The United States and China are barreling toward a critical trade agreement as negotiators prepare for high-stakes talks in Stockholm on July 28, just weeks before an August 12 deadline that could trigger a punishing tariff spike. President Donald Trump declared the two nations are "very close to a deal," signaling cautious optimism after months of tense negotiations aimed at resolving a $295.4 billion trade deficit and China’s strategic chokehold on rare earth exports. But as Washington inches toward an agreement, experts warn against trusting Beijing’s promises, especially given its history of economic coercion and broken commitments.

Stockholm showdown: A last push for compromise

With the clock ticking, U.S. and Chinese officials will meet in Sweden’s capital to finalize terms before tariffs automatically revert to triple-digit levels, effectively freezing trade between the world’s two largest economies. The talks follow earlier negotiations in Geneva and London, where both sides reached tentative agreements on export controls and rare earth shipments. Treasury Secretary Scott Bessent downplayed concerns about the deadline, telling market participants, “I tell market participants not to worry about Aug. 12.” Yet skepticism remains. China, which dominates 80% of the global rare earth supply, previously weaponized exports by abruptly halting shipments to the U.S. in April in a move designed to cripple American manufacturing of everything from electric vehicles to military hardware. Although Trump claims the dispute is resolved, National Economic Council Director Kevin Hassett admitted China’s shipments remain below agreed levels. “They had things we wanted. We had things they wanted, and we're in a very good place,” Bessent acknowledged, framing the negotiations as a tactical exchange rather than a partnership built on trust.

China’s leverage and America’s vulnerability

Beijing’s economic ascent since joining the World Trade Organization in 2001 has been fueled by predatory practices: intellectual property theft, forced technology transfers, and state subsidies flooding global markets with cheap goods. Now, as talks intensify, China holds a powerful bargaining chip—its near-monopoly on rare earths—while demanding concessions from the U.S., including reduced tariffs and loosened tech export controls. The Trump administration has already made concessions, granting licenses to chipmaker Nvidia to resume sales to China despite earlier restrictions. Meanwhile, Beijing has dangled the prospect of a Trump-Xi meeting later this year, a diplomatic carrot analysts say could ease tensions. “The future prospect of the heads of state summit is very beneficial to the negotiations,” said Sun Chenghao, a Beijing-based scholar, suggesting China might increase purchases of U.S. goods in exchange for tariff relief. But critics argue such promises are empty. China has repeatedly reneged on past agreements, and its recent antitrust probe suspensions—like the one targeting DuPont—appear timed to manipulate U.S. negotiators. “In the past, we didn’t consciously use these cards. Now, I believe China will increasingly take the initiative to consider playing them,” warned Wu Xinbo, a Chinese foreign policy adviser, essentially admitting to Beijing’s strategy of leveraging economic dependencies. While Trump’s team pushes for a deal, the broader conflict remains unresolved. The U.S. still imposes 55% tariffs on Chinese goods, including 20% tied to fentanyl trafficking—a point of contention Beijing desperately wants lifted. Meanwhile, the Commerce Department is reportedly delaying aggressive tech restrictions to avoid derailing talks in a move that risks undermining national security for short-term gains. The Stockholm meeting may yield another 90-day truce extension, but substantive progress—like dismantling China’s state-driven trade abuses—remains elusive. “Geneva and London were really just about trying to get the relationship back on track,” said Scott Kennedy of the Center for Strategic and International Studies, emphasizing that core disputes linger. As the August deadline looms, America’s reliance on China’s supply chain is a dangerous vulnerability. Whether through rare earths, drones, or TikTok’s U.S. operations, Beijing has proven it will exploit every leverage point. The Stockholm talks may delay economic pain, but without structural reforms, any “deal” will merely postpone the inevitable reckoning.     Sources for this article include: TheEpochTimes.com Reuters.com CNN.com

economy China market crash national security Trump big government trade money supply supply chain tariffs trade wars