Stockholm: The US and China are poised to recommence trade negotiations on Monday, amid optimistic forecasts that the two leading global economies may agree to a 90-day extension of their existing trade war truce. The discussions in Sweden are spearheaded by US Treasury Secretary Scott Bessent and China’s Vice Premier He Lifeng, and come shortly after US President Donald Trump revealed a framework tariffs deal with the European Union.

According to BBC, the current truce, which temporarily reduced tariffs between the US and China, is scheduled to conclude on August 12. However, the South China Morning Post reported that insiders from both nations anticipate a further three-month extension. Concurrently, the Financial Times disclosed that the US has halted restrictions on technology exports to China, aiming to facilitate trade discussions and secure a meeting between Trump and President Xi Jinping this year. The trade debate prominently features technology exports, especially AI chips, due to concerns from US security officials regarding their potential military applications in China.

The renewed US-China talks follow recent trade agreements between Washington, the EU, and Japan. On Sunday, Trump, alongside European Commission President Ursula von der Leyen, declared a trade agreement framework, resolving a prolonged economic face-off. Additionally, Trump announced a “massive” trade deal with Japan, which involves a $550 billion investment in the US by Japan and imposes a 15% tariff on Japanese goods entering the US, lower than the previously threatened 25%.

The US has also achieved tariff agreements with the UK, Indonesia, and Vietnam, with the UK securing the lowest tariff rate at 10%. While no immediate breakthroughs are anticipated from the US-China discussions this week, there is cautious optimism that an extension to the truce could prevent further disruptions in global trade caused by new tariffs.