China and US Agree to Cut Tariffs on $60 Billion in Goods

China and the United States have agreed to reduce tariffs on $60 billion worth of goods traded between the two countries, marking a significant step in efforts to stabilize their strained economic relationship. The agreement covers a wide range of products, including agricultural commodities, household appliances, cosmetics, toys, medical equipment and other consumer goods. Under the arrangement, each country has identified $30 billion in non-sensitive trade that will receive more favourable tariff treatment.

US Trade Representative Jamieson Greer said the measure would improve market access for about 30 percent of US exports to China. The tariff reductions formed part of a broader understanding reached during a summit between Chinese President Xi Jinping and US President Donald Trump in Washington. The two governments also agreed to extend their existing trade truce, giving officials additional time to negotiate unresolved economic and commercial issues.

China's tariff reductions will cover a range of American agricultural products, including corn, wheat, sorghum, meat, dairy products, vegetable oils and meals. The list also includes fish and seafood, logs and wood products, cosmetics and medical devices. Soybeans, however, were not included in the newly announced tariff reduction list. China has already resumed substantial purchases of US soybeans under an earlier agreement involving annual purchases of 25 million metric tons.

The United States, meanwhile, plans to reduce tariffs on various Chinese consumer products. These include small household appliances such as coffee makers and toasters, tableware, blankets, bed linens, toys, fireworks, artificial flowers, Christmas tree lights, holiday decorations and children's car seats. The breadth of the products involved means the agreement could affect manufacturers, exporters, retailers and consumers in both markets.

China's Commerce Ministry said the two-month extension of the trade truce, running through January 10, would give both sides an opportunity to assess existing arrangements and determine how to address remaining economic and trade issues. The ministry also emphasized the importance of maintaining a stable and predictable policy environment for businesses. Officials from both countries are expected to continue discussions on investment opportunities, market barriers, regulatory transparency and concerns raised by companies.

Despite the agreements, financial markets showed that uncertainty remains. Chinese stocks fell sharply following the summit, with the CSI300 blue-chip index declining more than 2 percent to a one-year low. Technology shares were particularly affected by renewed US efforts to restrict the use of Chinese components in American data centres. The market reaction demonstrates that the tariff agreement has not eliminated broader strategic and technological tensions between the two economies.

Agriculture is expected to remain a major area of cooperation. China and the United States will establish an agriculture working group under their trade council, with its first meeting scheduled before the end of the year. The group will address market access and regulatory issues affecting agricultural trade. The arrangement could provide a formal mechanism for resolving disputes and improving trade flows.

The summit also produced an agreement for China to import 10 million metric tons of US coal annually in 2027 and 2028. The volume represents roughly 2 percent of China's annual coal imports. Chinese officials described US coal as a useful supplement to domestic supplies while highlighting its contribution to employment and income in the American coal industry. Oil and liquefied natural gas were not included in the agreement.

Beyond tariffs and commodity purchases, Washington and Beijing agreed to strengthen communication in several sensitive areas. The two sides will establish a channel for discussing artificial-intelligence-related incidents and plan another dialogue before the end of November. China will also review applications from foreign financial institutions, including US-backed companies, seeking to operate and establish branches in the Chinese market.

The countries will further discuss expanding direct air services between China and the United States. Taken together, the measures represent an attempt to create greater predictability in bilateral trade while addressing specific commercial concerns. However, the continuation of restrictions in strategic sectors, particularly technology, shows that the broader US-China economic relationship remains complex. The latest tariff reductions therefore provide a framework for continued negotiations rather than a complete resolution of the underlying disputes.