China and the United States have agreed to reduce tariffs on $60 billion worth of goods imported from each other. The tariff cuts will apply to a range of products, including US corn, cosmetics, and Chinese household appliances. The agreement was reached under the US-China Board of Trade, with both countries recommending $30 billion of trade in non-sensitive goods for more favourable tariff treatment.
The reciprocal tariff reduction is seen as a significant development in the ongoing trade talks between the two countries. According to US Trade Representative Jamieson Greer, the agreement will provide "unlocking improved market access" for about 30% of US exports to China. The tariff cuts will apply to products such as US agricultural goods, fish and seafood, logs and wood products, and medical devices.
China has agreed to trim duties on a variety of US agricultural goods, including corn, wheat, sorghum, meat, dairy, vegetable oils, and meals. However, soybeans were not included in the list. Beijing will also reduce levies on US fish and seafood, logs and wood products, cosmetics, and medical devices. In return, the US will cut tariffs on Chinese small appliances, tableware, blankets, and bed linens.
The agreement also includes a two-month extension of a trade truce between the two countries, which will now run through to January 10. The extension provides a "relatively stable and predictable policy environment" for cooperation among companies and continued active discussions. Both sides will hold regular talks on potential investment opportunities and barriers, enhancing policy transparency and predictability.
The trade truce extension and tariff cuts are seen as a positive development for both countries. China's commerce ministry said the agreement will provide room for both sides to evaluate their ongoing arrangement to resolve economic and trade issues. The ministry also noted that the agreement will help to promote cooperation among companies and provide a stable policy environment.
The agreement also includes a commitment from China to import 10 million metric tons of coal annually from the US in 2027 and 2028. This amount roughly equals 2% of China's coal imports each year. Additionally, both countries have agreed to set up an agriculture working group under a trade council, which will hold its first meeting before the year ends to discuss two-way market access and regulation.
The US-China agreement also covers other areas, including artificial intelligence and financial services. Both sides have agreed on 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 China.
Key points
- China and US agree to cut tariffs on $60 billion worth of goods.
- The agreement includes a two-month extension of a trade truce between the two countries.
- China has agreed to import 10 million metric tons of coal annually from the US in 2027 and 2028.
