In a high-stakes diplomatic moment, China's Vice Premier HeLifeng arrives in Stockholm to lead a third round of trade negotiations with the U.S., following meetings in Geneva and London. China enters this round emboldened. Its dominant grip on strategic minerals has forced U.S. officials to reverse export curbs, including easing restrictions on Nvidia AI chips.

Delivering better-than-expected economic growth and a record export surplus, China has pivoted away from U.S.-centric trade dependence, reinforcing its leverage in negotiations.

U.S. Treasury Secretary Scott Bessent, leading the American delegation, frames the talks as a bid to extend the May trade truce, which protects both sides from looming tariff escalations through August12. Both governments expect to finalize an extension, possibly another 90-day pause, delaying a steep tariff re-imposition that could reach up to 145% without an agreement. Analysts foresee a possible Trump-Xi summit this fall if talks sustain momentum.

Key negotiation themes include:

• Tariff rollbacks, especially the 20% US duties tied to fentanyl allegations, which Beijing argues are unjustified despite its recent controls on precursors and nitazenes.

• Tech-sector restrictions, including U.S. export controls on Chinese firms listed under the Commerce Department's Entity List, and demands by China to ease such barriers.

• Chinese leverage on rare earths, magnets, batteries and drone components, prompting U.S. relief on export curbs in London, and demonstrating China's strategic edge in supply chains.

Meanwhile, Washington plans to raise concerns over China's continued purchase of sanctioned oil from Russia and Iran, and the status of TikTok's U.S. spinoff-awaiting Beijing's approval. A recent Chinese ban on two U.S. individuals departing China has added tension; U.S. Commerce Secretary Howard Lutnick decried it as "outrageous," though Bessent remains publicly optimistic about the constructive nature of trade relations.

China's trade agenda in Stockholm is ambitious. Analysts highlight its goal of achieving tangible tariff reductions, tech openness, and deeper bilateral cooperation, while protecting its own industrial interests. Still, experts caution the current detente remains fragile, vulnerable to sudden flashpoints or policy reversals.

With major global repercussions, these talks will likely determine whether the fragile truce holds-and whether trade tensions escalate into renewed economic confrontation or yield a path toward sustainable cooperation.