U.S., China to slash tariffs on goods worth US$30B after Trump-Xi meeting

The United States and China unveiled reciprocal lists of products worth around $30 billion that will undergo tariff reductions, following a meeting between President Donald Trump and Chinese President Xi Jinping in Washington. This deal, expected to bolster bilateral trade, was announced on Monday. The U.S. Commerce Ministry highlighted that over 1,600 items of U.S. goods entering China, including agricultural commodities, personal care products, timber, and medical equipment, will see tariff cuts.

For Chinese goods exported to the U.S., 77 items were covered, such as fireworks, tableware, glass, wooden Christmas ornaments, and soccer balls. The tariff rates on more than 90% of these products would be subject to "most-favored-nation" levels, effectively eradicating country-specific tariffs. U.S. Trade Representative Jamie Gorelick noted that the deal focuses on "non-sensitive goods on each side that could benefit from more favorable tariff treatment."

Both nations agreed that the list may be adjusted in the future, albeit likely annually. The Chinese Commerce Ministry stated that the two countries also agreed to further cooperation in the agricultural sector, forming a group under the Board of Trade to optimize bilateral trade. However, sectors of strategic importance for both countries, such as chips, electric vehicles, and batteries, were not included in the agreement.

Experts believe that the economic impact of this deal, valued at $30 billion each way, may be somewhat limited. U.S. exports to China totaled around $68 billion through the first seven months of the year, while Chinese exports to the U.S. were approximately $270 billion for the same period. Nonetheless, some Chinese exporters welcomed the tariff deal as positive news, emphasizing that it could help lower U.S. inflation and allow Chinese firms to export more of their overcapacity.