The US and China are due to start a fresh round of talks on Monday as expectations grow that the world’s two biggest economies could agree a 90-day extension to their trade war truce.
The meetings in Sweden – led on Washington’s side by Treasury Secretary Scott Bessent and for Beijing by Vice Premier He Lifeng – come hours after US President Donald Trump announced a framework tariffs deal with the European Union.
The current 90-day truce between the US and China – which saw the two countries temporarily lowering tariffs on each other – is set to end on 12 August.
Since Trump returned to the White House in January, the US and China had raised import levies on each other to more than 100%.
The current 90-day tariffs pause came after top officials from the US and China met in Geneva and London earlier this year.
Last week, Bessent said talks with China were in “a very good place” and suggested the new round of talks could result in a second truce.
On Monday, citing sources on both sides, the Hong Kong-based South China Morning Post reported that the US and China are expected to extend the truce by another three months.
Meanwhile, the Financial Times reported that the US has frozen restrictions on technology exports to China to avoid hurting trade talks and help Trump secure a meeting with President Xi Jinping this year.
Technology exports, specifically chips used for artificial intelligence (AI), have been at the centre of the trade dispute.
US security officials have raised concerned that high-end US chips could be used by China’s military and help its companies in the race for innovation.
The BBC has contacted the US Treasury and the Commerce Department, and the Chinese embassy in Washington for comment.
The latest US-China talks come after Washington struck deals with both the EU and Japan in the last week.
On Sunday, Trump and European Commission President Ursula von der Leyen announced a trade agreement framework.
It ended a months-long standoff between two of the world’s biggest economic partners.
Last week, Trump said Washington had agreed a “massive” trade deal with Tokyo.
Under the agreement, Japan would invest $550bn (£407bn) in the US while its goods sold to America would be taxed at 15% when they reach the country – below the 25% tariff Trump had threatened.
The US has also struck tariffs deals with the UK, Indonesia and Vietnam.
At 10%, Britain has negotiated the lowest US tariff rate so far.
No similar breakthrough is expected from the US-China talks this week but, with expectations of an extension to their truce, there are hopes that global trade will not be hit by fresh tariffs disruption.