Top U.S. and Chinese economic officials are set to meet again on Monday to renew trade negotiations with an extension of lower tariff levels on the cards.
Talks between the world's two largest economies are scheduled to take place over two days in Stockholm, the Swedish capital and come as other countries rush to finalize deals with Washington.
For dozens of trading partners, failing to strike an agreement in the coming days means they could face significant tariff hikes on exports to the U.S. come Friday, Aug. 1.
The steeper rates, threatened against partners like Brazil and India, would raise the duties their products face from a "baseline" of 10% now to levels up to 50%.
Tariffs imposed by the Trump administration have already effectively raised duties on U.S. imports to levels not seen since the 1930s, according to data from The Budget Lab research centre at Yale University.
For now, all eyes are on discussions between Washington and Beijing as a delegation including U.S. Treasury Secretary Scott Bessent meets a Chinese team led by Vice Premier He Lifeng in Sweden.
Beijing said on Monday it hoped the two sides could hold talks in the spirit of "mutual respect and reciprocity."
Foreign Ministry spokesperson Guo Jiakun said Beijing sought to "enhance consensus through dialogue and communication, reduce misunderstandings, strengthen cooperation and promote the stable, healthy and sustainable development of China-U.S. relations."
While both countries imposed tariffs on each other's products in April, reaching triple-digit levels, U.S. duties this year have been temporarily lowered to 30%, and China's countermeasures have been slashed to 10%.
But the 90-day truce, instituted after talks in Geneva in May, is set to expire on Aug. 12.
Since the Geneva meeting, the two sides have convened in London to iron out disagreements.
"There seems to have been a fairly significant shift in (U.S.) administration thinking on China since, particularly the London talks," said Emily Benson, head of strategy at Minerva Technology Futures.
"The mood now is much more focused on what's possible to achieve, on warming relations where possible and restraining any factors that could increase tensions," she told Agence France Presse (AFP).
Talks with China have not produced a deal, but Benson said both countries have made progress, with certain rare earth and semiconductor flows restarting.
"Secretary Bessent has also signalled that he thinks a concrete outcome will be to delay the 90-day tariff pause," she said. "That's also promising, because it indicates that something potentially more substantive is on the horizon."
The South China Morning Post, citing sources on both sides, reported Sunday that Washington and Beijing are expected to extend their tariff pause by another 90 days.
Trump has announced pacts so far with the European Union, Britain, Vietnam, Japan, Indonesia and the Philippines, although details have been sparse.
An extension of the U.S.-China deal to keep tariffs at reduced levels "would show that both sides see value in continuing talks," said Thibault Denamiel, a fellow at the Centre for Strategic and International Studies.
U.S.-China Business Council President Sean Stein said the market was not anticipating a detailed readout from Stockholm: "What's more important is the atmosphere coming out."
"The business community is optimistic that the two presidents will meet later this year, hopefully in Beijing," he told AFP.
"It's clear that on both sides, the final decision-maker is going to be the president."
For others, the prospect of higher U.S. tariffs and few details from fresh trade deals marks "a far cry from the ideal scenario," said Denamiel.
But they show some progress, particularly with partners that Washington has signaled are on its priority list, like the EU, Japan, the Philippines and South Korea.
The EU unveiled a pact with Washington on Sunday, while Seoul is rushing to strike an agreement, following Japan and the Philippines, which have already reached the outlines of deals.
Breakthroughs have been patchy since Washington promised a flurry of agreements after unveiling and then swiftly postponing tariff hikes targeting dozens of economies in April.
Denamiel warned of overlooking countries that fall outside Washington's priority list.
Solid partnerships are needed, he said, if Washington wants to diversify supply chains, enforce advanced technology controls, and tackle excess Chinese capacity.
