The details came days after Chinese President Xi Jinping met with President Donald Trump in Washington in his first state visit to the U.S. since 2015. The U.S. had already reduced tariffs against China after Trump’s tariffs reached as high as 145% at one point last year, as tensions between the two countries eased.
China’s commerce ministry said in a statement the agreement will help strengthen trade cooperation.
Most country-specific tariffs practically eradicated
The lists included 1,619 items of U.S. goods entering China, ranging from agricultural commodities, hair and personal care products to timber and medical equipment. Coal from the U.S. will also be included.
For Chinese goods exported to the U.S., 77 categories were covered, including fireworks, tableware, toys like dolls and puzzles, glass and wooden Christmas ornaments and soccer balls.
Tariff rates on over 90% of the products would be subject to “most-favored-nation” levels, the Chinese commerce ministry said, meaning that country-specific tariffs will effectively be eliminated.
Most-favored-nation rates are the standard tariffs applied under World Trade Organization rules, but they can differ from item to item and are often in the single digits.
U.S. Trade Representative Jamieson Greer said in a separate statement the product lists focused on “nonsensitive goods on each side that could benefit from more favorable tariff treatment.” The deal could help secure market access for U.S. farmers, manufacturers, businesses and workers, while benefiting American consumers with imports from China including household goods and toys, Greer said.
Both countries said they agreed the list may be adjusted later as needed, but amendments were likely to be no more than on an annual basis.
The Chinese commerce ministry said the two countries agreed to further cooperate in the agricultural sector, forming a group under the Board of Trade established in May to optimize bilateral trade.
Sectors of strategic importance for both countries, such as chips, electric vehicles and batteries, were not covered under the agreement.
A potential boost to US-China bilateral trade
“This is a positive outcome for these affected products compared to a smaller tariff cut, and could lead to a more significant boost to bilateral trade,” said Lynn Song, chief economist for Greater China at ING Bank.
The lowered tariffs could be a win for U.S. consumer brands, added Jacob Cooke, CEO of WPIC Marketing + Technologies based in Beijing, as some of the products covered by China's list of U.S. imports included fast-growing categories like hair care, personal care products and infant formula.
With the U.S. list for Chinese products focused more on consumer goods, it could help lower U.S. inflation while also allowing Chinese firms to export more of their overcapacity, said Gary Ng, a senior economist at French bank Natixis.
Some experts said, however, the economic impact at $30 billion each way may be limited overall.
U.S. exports to China were roughly $68 billion through the first seven months of this year, while Chinese exports to the U.S. were at around $270 billion for the first eight months, said Prashant Bhayani, chief investment officer for Asia at BNP Paribas Wealth Management.
A $30 billion deal each way will be “more meaningful” for U.S. exports to China in terms of percentage share, he said.
China's trade surplus expected to remain elevated
While the deal did not cover sensitive strategic goods, analysts believe U.S.-China trade will likely continue to recover for the rest of the year after steep U.S. tariffs on Chinese products last year hit bilateral trade.
The U.S. and China last week also reached a two month extension of the broader trade truce that was set to expire Nov. 10 to January.
China’s trade surplus, which reached a record $1.2 trillion last year, will likely remain elevated. By August, it stood at about $800 billion, putting this year’s surplus “on pace to exceed the 2025 record,” according to Ecaterina Bigos, a senior market strategist with BNP Paribas Asset Management.
