US Treasury Secretary plans extension for China tariff negotiations

On July 22, 2025, US Treasury Secretary Scott Bessent announced he would travel to Stockholm to engage in crucial tariff negotiations with Chinese officials. This meeting is anticipated as both countries prepare to discuss an extension of a mid-August deadline for the reimplementation of previously escalated tariffs. Recent discussions have signaled a potential thaw in US-China relations, as mixed performance was seen in Asian equities, primarily influenced by Vietnam’s trade deals and the varying outcomes for stocks in Hong Kong and Mainland China. As the Hang Seng Index noted slight gains, foreign participation remained restrained, indicating cautious market sentiment. The backdrop of these negotiations includes a pattern of escalating tariffs imposed between the US and China earlier in the year, which severely affected bilateral trade. Since then, both nations have sought to de-escalate these tensions while also addressing broader economic concerns. Bessent emphasized that in addition to tariffs, the talks would likely cover the implications of China’s purchases of oil from Iran and Russia. These discussions follow a series of earlier meetings in Geneva and London aimed at mitigating trade disagreements that arose from accusations against China regarding compliance with previous trade agreements. Amid these discussions, Central Huijin, the state investment firm of China, has begun purchasing large amounts of equity ETFs, underscoring a strategy to stabilize its financial markets, a move that resonates with ongoing governmental support in the face of recent economic challenges. The energy sector, particularly solar companies, showed an uptick, indicating certain sectors remain robust despite the overall market's mixed signals. Furthermore, the exhibition of value-investing biases in various stocks reflects investor sentiments as they position themselves for potential outcomes depending on the negotiations. As the August deadline approaches, investments and market strategies could shift significantly based on the negotiations' outcomes. The anticipated meeting between Bessent and Chinese officials is viewed as a crucial step in rebuilding trust and facilitating economic cooperation, highlighting the delicate nature of international trade relationships in a climate marked by volatility and uncertainty.