US and China Agree Tariff Cuts on $60 Billion of Goods, Extend Trade Truce

China and the United States have agreed to reduce tariffs on $60 billion worth of goods traded between them, covering products that range from American corn and cosmetics to Chinese household appliances and toys.

Under the US-China Board of Trade, each side has proposed $30 billion of non-sensitive trade for more favourable tariff treatment, the US Trade Representative said. For Washington, the move opens improved market access for roughly 30% of American exports to China.

The reciprocal tariff reductions, along with an extension of the trade truce, emerged from the second summit this year between President Xi Jinping and US President Donald Trump, held in Washington last week.

Agriculture and coal

One White House list showed that China plans to lower duties on a range of US farm goods, including corn, wheat, sorghum, meat, dairy, vegetable oils and meals. Soybeans were not included. Beijing will also look to reduce levies on US fish and seafood, logs and wood products, cosmetics and medical devices.

A second list set out Washington's reciprocal cuts for Chinese small appliances such as coffee makers and toasters, tableware, blankets and bed linens. It also covered toys, fireworks, artificial flowers, Christmas tree lamps and other holiday decorations, and children's car seats.

China's commerce ministry said the two-month extension of the truce, running through to January 10, would give both sides room to assess their arrangement for resolving economic and trade issues and to consider how to move forward. It described the extension as providing a relatively stable and predictable policy environment for companies.

The two countries will hold regular talks on potential investment opportunities and barriers, policy transparency and predictability, and business concerns.

China's product choices appear aimed at helping Beijing meet what the White House describes as a $17-billion commitment to buy agricultural goods. China has already resumed large-scale purchases of US soybeans under a deal struck last year for 25 million metric tons a year.

An agriculture working group will be set up under a trade council, with its first meeting before the end of the year to discuss two-way market access and regulation. The summit also produced an agreement for China to import 10 million metric tons of coal annually from the United States in 2027 and 2028, roughly 2% of China's yearly coal imports. Liquefied natural gas and oil were not on the list.

AI, finance and flights

On artificial intelligence, the two sides agreed to a communication channel for incidents and will hold a follow-up dialogue by the end of November. China will also examine and approve foreign financial services institutions, including those with US capital, to conduct business and open branches in the country. Communication will continue on increasing flights between China and the United States.

Despite the announcements, Chinese stocks fell sharply on Monday, with investors finding few concrete details to cheer from the summit and underlying tensions resurfacing. Technology shares were hit by a bipartisan US push to ban Chinese components from data centres, and the benchmark blue-chip index slid more than 2% to a one-year low.