Trade talks continue between the US and China as representatives work to prepare the ground for the Xi – Trump meeting this week. The negotiations are reportedly aimed at maintaining stability in the fragile trade relationship, as opposed to pushing major policy shifts in either direction. Tariffs introduced by the US since the Supreme Court invalidated IEEPA restored duties on China to within 7.5 percentage points of the level agreed upon between the sides last November, with the agreement set to expire this November. The USTR has reportedly concluded an additional Section 301 investigation, focused on issues of excess manufacturing capacity, and recommending an additional 7.5% tariff on Chinese exports. The White House seemed ready to announce this increase before the September meeting, but the administration is now expected to hold off on the announcement – either to avoid a possible escalation, or to use the findings as leverage in the current negotiations. The administration is reportedly prepared to offer a three to six month extension of the current trade truce, which includes not only tariff levels – changes to which could impact international logistics – but also the pause of $1M US port call fees on China-linked vessels. The fees went into effect in mid-October of last year. China quickly imposed similar fees on US vessels until the sides announced a one-year pause on November 10th. Despite the early start to east-west ocean peak season back in May which pushed container rates up sharply into early July, transpacific rates remain at about peak levels while Asia – Europe prices continue to cool. Resilient transpacific demand – possibly helped by the lack of a tariff hike in late July, and now including a last push to get containers moved before the Golden Week holiday – alongside persistent, weather-driven, Far East port congestion and blanked sailings, are keeping container rates at year highs. Far East – West Coast prices increased 4% to