China Net special commentator Sun Lipeng
In the past two days, He Lifeng, the Chinese leader in Sino US economic and trade affairs and Vice Premier of the State Council, held Sino US economic and trade talks in Stockholm, Sweden with US leaders, US Treasury Secretary Bessent, and Trade Representative Greer. From Geneva to London, and then to Stockholm, China and the United States have gone through three rounds of dialogue and negotiations, engaging in candid, in-depth, and constructive exchanges. The results of this round of talks are positive, and both sides are working together to enhance consensus and accumulate mutual trust, but challenges still exist.
China and the United States continue to implement a 'ceasefire' on tariffs. The current round of talks has achieved positive results, with China and the United States continuing the "ceasefire" on tariffs and deepening mutual trust. According to the consensus reached during the talks, both sides will continue to push for the extension of the suspended 24% US equivalent tariff and the 90 day extension of China's countermeasures as scheduled. Besent said that if everything goes smoothly, another high-level meeting between China and the United States may be held in about 90 days. In fact, in the first two rounds of talks, China and the United States have achieved results on issues that are relatively easy to reach consensus on, such as suspending high tariffs and moderately relaxing export controls. However, subsequent negotiations will inevitably enter a "deep water zone", and both sides will need more time to prepare for achieving greater results. Guided by the important consensus reached in the June 5th phone call between the two heads of state, China and the United States have agreed to continue dialogue and negotiations, further consolidate consensus, and deepen mutual trust, injecting a "shot in the arm" into China US relations and the world economy.
The talks demonstrated prudence and pragmatism. The details of the talks were not disclosed much, reflecting the cautious and pragmatic style of both China and the United States. The first day of the third round of high-level negotiations between China and the United States lasted for more than 5 hours, but representatives from both sides did not disclose any details to the public. Even after the talks, the US economic and trade team only stated in a media interview that "the final decision will be made by the president" and did not disclose too many specific details of the negotiations. This means that both sides will exchange views on important issues in a pragmatic manner, avoiding unexpected interference and leaving enough room for each other's subsequent policy adjustments and negotiation interactions.
Economic and trade challenges still pose risks. China has always approached the United States with a stance of neither humility nor arrogance, and with sincerity and principles. In the China US talks, the Chinese side has not compromised on principled issues and is full of sincerity in dealing with cooperation issues. From the selection of the three meeting venues, it can be seen that the China US talks were conducted on an equal basis and in an atmosphere of mutual respect. This kind of equality and respect is not easy, and it is a concrete manifestation of China's absolute strength and confidence that China dares to uphold justice and firmly counterattack. But it should also be noted that the economic and trade challenges between China and the United States are still significant, and the possibility of a further decline in bilateral economic and trade relations still exists.
Risk of tariff rebound. After the meeting, US Trade Representative Greer said in an interview with US media that if China and the US cannot reach an agreement, "a rebound in tariffs cannot be ruled out". This is not only an economic threat and negotiation pressure strategy, but it may also become a real risk in the future, causing a serious setback in the economic and trade relations between China and the United States.
The risk of 'secondary tariffs'. Several American media outlets have pointed out that the issues discussed at the Stockholm talks go beyond retaliatory tariffs, including the possibility of the United States imposing "secondary tariffs" on Russian goods. Once implemented by the United States, it will seriously impact the normal energy trade between China and Russia, and have a serious impact on China's national security. In the absence of a resolution to the fentanyl tariff dispute, "secondary tariffs" may become a new trouble in the economic and trade relations between China and the United States.
Principle differences. On macroeconomic issues, the United States is attempting to "persuade" China to increase domestic consumption, reduce manufacturing output, and fundamentally adjust the economic structure. Against the backdrop of the US government's push to shift the economy from "virtual" to "real", it is unreasonable to expect China to move from "real" to "virtual". If the United States still wants to pressure China on its economic structure in the future, it is likely to hit the iron plate again.
The Chinese side's position on the economic and trade relations between China and the United States has always been consistent. The essence of the economic and trade relations between China and the United States is mutual benefit and win-win. Both sides have broad common interests and broad cooperation space in the field of economy and trade. Cooperation between China and the United States benefits both sides, while confrontation harms both. We have always had positive expectations for the China US economic and trade talks, but if there are "unexpected risks" in the negotiations, China also has sufficient confidence and strength to respond. (The author is the Deputy Director and Researcher of the American Institute of the China Institute of Modern International Relations.)
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