The US-China tariff truce is in effect for now, but does Trump have the final say?

On Tuesday, U.S. and Chinese officials agreed to seek an extension of their 90-day tariff truce, after two days of what both sides described as constructive talks in Stockholm aimed at defusing an escalating trade war between the world’s two largest economies that threatens global growth.

No major breakthroughs were announced, and U.S. officials said President Donald Trump must decide whether to extend the trade truce, which expires on Aug. 12, or potentially allow tariffs to rise to triple digits. But U.S. Treasury Secretary Scott Besant played down any expectations that Trump would reject the extension.

“The meetings were very constructive,” Besant told reporters after they concluded. “We just haven’t given approval yet.”

Returning to Washington after a visit to Scotland, where he signed a trade deal with the European Union, Trump said Besant had just briefed him on the negotiations with China.

“He felt very good from the meeting, better than he felt yesterday,” Trump told reporters aboard Air Force One.

After months of threatening high tariffs on trading partners, Trump has secured trade deals with the EU, Japan, Indonesia and others, but China’s powerful economy and its control over global flows of rare earth elements make these negotiations particularly complicated.

In May, the two countries stopped short of imposing triple-digit tariffs on each other that would have amounted to a bilateral trade embargo. But global supply chains and financial markets could face further disruption without a deal.

Bessent told reporters that he expects to meet with Trump on Wednesday after both return to Washington, and the president will have the final say on a possible extension.

Another 90-day extension is an option, U.S. Trade Representative Jamieson Greer added.

“Of course, we had constructive meetings to come back with a positive report. But extending the pause will be up to him,” Greer said after talks at Rosenbad, the Swedish prime minister’s office in central Stockholm.

Trump expects meeting with XI by end of year

Besant said there would likely be another meeting between US and Chinese officials in about 90 days and that agreements on the flow of Chinese rare earths were being refined after previous talks in Geneva and London.

“There was good personal interaction, good mutual respect being built. I think we understand their agenda much better,” he said.

Underscoring the stakes, the International Monetary Fund on Tuesday raised its forecast for global growth but noted a potential rebound in tariff rates as a major risk.

Negotiations between China and the EU

The talks in Stockholm follow Trump’s biggest trade deal with the European Union on Sunday, a 15% tariff on most goods exported from the EU to the United States, and a deal with Japan.

This agreement brought some relief to the EU, but also disappointment and anger, with France condemning the deal as “subordination” and Germany, Europe’s largest economy, warning of “significant” damage.

Analysts say China could exert influence over the global market for rare earth elements and magnets, used in everything from military equipment to car wiper motors.

Unlike the EU, it does not rely on the United States for security ties and could allow trade talks to drag on for a few more months, said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.

Previous U.S.-China trade talks in Geneva and London in May and June focused on reducing U.S. and Chinese retaliatory tariffs from triple-digit levels and restoring the flow of rare earth minerals that China had halted; as well as Nvidia’s (NASDAQ:NVDA) H20 artificial intelligence chips and other goods that the United States had halted.