Key facts
- The U.S. and China are discussing tariff reductions on non-sensitive goods.
- President Trump and President Xi Jinping agreed to a one-year trade truce.
- U.S. tariffs on Chinese exports will be reduced from 57% to 47%.
- China will suspend rare earth metal export controls for one year.
- China agreed to curb the fentanyl precursor trade and resume soybean purchases.
- The U.S. will suspend export controls on Chinese companies.
The United States and China are considering lowering tariffs on "nonsensitive" products as leaders prepare for a summit between President Donald Trump and President Xi Jinping. Sources familiar with preliminary discussions indicated that an agreement on the scope of these reductions was not immediately reached.
This comes after Trump and Xi agreed to a one-year trade truce during a meeting in South Korea. As part of this agreement, the U.S. reduced its tariffs on Chinese exports from 57% to 47%, and China suspended its export controls on rare earth metals for the same duration. The U.S. also agreed to postpone fees on Chinese ships arriving at U.S. ports, and China committed to purchasing significant quantities of U.S. soybeans and enhancing efforts to halt the flow of fentanyl precursor chemicals. Trump hinted at a potential deal for China to buy U.S. oil and gas.
The U.S. administration also stated it would suspend plans for export controls on subsidiaries of Chinese companies. While contentious issues like Taiwan were not discussed, the leaders did engage in discussions regarding the war in Ukraine. The trade truce was seen as a more comprehensive agreement than previous ones, with plans for renegotiation after one year.
Separately, the Republican-controlled U.S. Senate passed a bill to repeal Trump's tariffs on Canada, following a similar move earlier in the week for tariffs on Brazil. This indicates some divergence within the Republican party regarding Trump's tariff policies.