China-US Trade Talks: The Art of the Deal – Standard Chartered

China-US Trade Talks: The Art of the Deal – Standard Chartered

Standard Chartered suggests that the ongoing trade negotiations between the United States and China are likely to continue beyond the current 90-day tariff truce, with both sides showing signs of increased caution. The bank’s baseline scenario sees tariffs remaining at current levels, with limited scope for escalation in the near term.

Following the tit-for-tat tariff exchanges in April and the subsequent de-escalation in May, both countries appear more reluctant to provoke further economic disruption. This cautious approach indicates that even in the event of renewed tensions, any new tariffs would likely come with targeted exemptions to minimize harm to businesses.

“What happens after the 90-day ceasefire is still uncertain,” the report notes. “But our best guess is that the truce will be renewed, and average tariff levels will remain unchanged. This would allow both countries to maintain trade flows while buying more time to address deeper, unresolved issues.”

Among these unresolved issues are long-standing bilateral tariffs, non-tariff barriers, and concerns around currency exchange rates. Moreover, the United States may be shifting some focus toward trade negotiations with other partners, as some of its other 90-day tariff pauses are set to expire earlier than the one with China.

Standard Chartered concludes that while a comprehensive deal within the current truce period is unlikely, a renewed pause is the most probable path forward. The bank believes that the peak of negative tariff-related headlines has already passed and anticipates only limited additional tariff action in 2025.