US-China Trade Talks in Stockholm

The US Treasury Secretary and China’s Deputy Prime Minister engaged in discussions about trade at the Swedish Prime Minister’s Office in Stockholm on Monday.

According to a source familiar with the negotiations, Reuters reported on Tuesday that “US-China trade talks concluded that day.”

The source noted that both nations are attempting to address significant trade and technology issues, with China looking for relief from US tariffs and restrictions on technology exports.

A spokesperson from the US Treasury indicated that “US-China talks will end for that day and will continue on Tuesday.”

Market Reaction

As of this writing, the US dollar is becoming integrated against its major counterparts, resulting in the AUD/USD pair dipping to a weekly low just above 0.6500.

US-China Trade War FAQ

• In broad terms, a trade war refers to an economic dispute between two or more nations stemming from extreme protective measures like tariffs. These barriers generally lead to rising import costs and increased living expenses.

• The economic fracas between the US and China commenced in early 2018 when then-President Trump introduced trade barriers, citing unfair practices and intellectual property theft. In retaliation, China imposed tariffs on various US products, including automobiles and soybeans. Tensions heightened until the signing of the US-China-1 trade agreement in January 2020, which aimed for structural reforms in China’s economic procedures to restore mutual trust. However, the COVID-19 pandemic diverted attention. It’s also notable that President Biden has maintained and even added tariffs since taking office.

• Donald Trump’s return as the 47th US president has reignited tensions between the two powers. During his 2024 election campaign, he vowed to implement 60% tariffs on China once he assumes office on January 20, 2025. With Trump back, the US-China trade war looks set to restart, potentially reshaping the global economic landscape, especially considering its impact on global supply chains and the flow of investment.