Truce or Tempest? The Fragile State of U.S.-China Trade Negotiations

Trump nears China trade truce extension, but final approval rests with him. Meanwhile, global tariffs escalate as deadlines loom

President Donald Trump’s recent declaration that the U.S. is “getting very close to a deal” with China to extend a trade truce suggests a potential thaw in the economic cold war between the world’s largest economies.

Speaking to CNBC, Trump downplayed urgency but struck a conciliatory tone: “It’s not imperative, but I think we’re going to make a good deal” .

The truce, set to expire on August 12, paused tit-for-tat tariffs on critical goods like rare earth magnets and select technologies. Yet this optimism masks a complex negotiation fraught with procedural hurdles and strategic posturing.

The Stockholm Talks and Trump’s Ultimate Authority

High-level discussions in Stockholm last week aimed to solidify a truce extension, but U.S. officials emphasized that any agreement hinges entirely on the President’s approval.

Treasury Secretary Scott Bessent explicitly noted that Trump “has final say on all the trade deals”, according to CNBC. This procedural reality injects uncertainty into the process, even as Chinese negotiator Li Chenggang cited “constructive” progress.

The U.S. team returned to Washington to brief Trump, who retains power to unilaterally reject terms. Should talks collapse, Bessent warned of a “boomerang” effect—an automatic snapback to April’s aggressive tariff levels, including 125% duties on Chinese goods and 20% on fentanyl-related products.

The disjointed timelines further complicate matters. While Trump’s global tariffs on other nations took effect this week, the China truce enjoys a narrow grace period until mid-August. A 90-day extension remains the most likely interim outcome, buying time for further negotiations.

However, U.S. Trade Representative Jamieson Greer stressed that any extension would be conditional.“We’ll either approve it or not”, said Donald Trump, according to CNBC.

Global Reverberations and Strategic Leverage

The China negotiations unfold against a backdrop of escalating U.S. trade offensives worldwide. In recent days, Trump:

• Threatened 250% tariffs on pharmaceuticals within 18 months

• Imposed 50% duties on Brazilian goods (excluding key imports like orange juice)

• Granted Mexico a 90-day tariff reprieve while confronting India over Russian oil ties

• Set 39% tariffs on Switzerland, triggering an emergency visit by Swiss President Karin Keller-Sutter to Washington

This multi-front pressure campaign reveals a deliberate strategy: using short-term economic pain as leverage to extract concessions. Bessent’s dismissal of the global tariff snapback’s severity—“it’s not the end of the world if these snapback tariffs are on for a few days to weeks”—underscores the administration’s view of duties as negotiating tools rather than endpoints.

For China, this context heightens stakes. A truce extension would offer respite but no long-term security, particularly as the U.S. links trade to geopolitical compliance, criticizing Beijing’s continued Iranian oil purchases despite earlier “blessings”.