• US and China wrap up two days of trade negotiations without a major breakthrough.
  • A 90-day extension of the current trade truce appears likely, delaying further tariff escalations.
  • Markets remain watchful as both sides seek common ground amid global economic pressures.

Negotiations Continue Amid Economic Pressures

The US and China have concluded their second day of high-level trade talks in Stockholm, with discussions led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng. While no significant agreements were announced, sources close to the talks suggest a 90-day extension of the existing trade truce is on the table. This would maintain the status quo on tariffs, providing both nations more time to negotiate.

US Commerce Secretary Howard Lutnick hinted at the likelihood of an extension, emphasizing the need to avoid further disruptions to global supply chains. However, the final decision rests with President Trump, who has yet to publicly comment on the matter. The potential pause comes as both economies grapple with slowing growth and lingering supply chain bottlenecks.

Market Reactions and Broader Implications

Financial markets have responded cautiously to the news, with major indices showing muted movements. Analysts note that an extension would provide temporary relief but does little to resolve deeper structural disputes over intellectual property, market access, and industrial subsidies.

"This is more about buying time than solving problems," said one trade policy analyst, speaking on condition of anonymity. "Both sides are under pressure domestically, and neither wants to be the one to escalate tensions further."

Business groups in both countries have largely welcomed the prospect of continued dialogue, though some lawmakers in Washington have criticized the lack of tangible progress. Meanwhile, Chinese state media has framed the talks as "constructive," signaling Beijing's preference for stability amid its own economic challenges.

What Comes Next?

If the truce is extended, working-level teams are expected to continue discussions on narrower technical issues. However, observers caution that without meaningful concessions from either side, the cycle of temporary fixes may persist well into 2026. The Stockholm round underscores how trade remains a rare area of engagement in an otherwise strained bilateral relationship.