In September 2026, following the latest round of talks between US President Donald Trump and Chinese President Xi Jinping, Washington and Beijing reached an agreement to reciprocally cut tariffs on about $30 billion worth of goods from each side, marking another concrete result in the up-and-down US-China trade negotiations of the past year. Officials from both sides said the "reciprocal tariff reduction" arrangement is intended to give more favorable tariff treatment to non-sensitive goods from each country, and multiple outlets described it as one of the most concrete economic outcomes of this round of Xi-Trump engagement.

The agreement did not come out of nowhere; it is a continuation of the repeated back-and-forth in US-China trade relations since last year. In October 2025, Trump and Xi met in Busan, South Korea, and agreed to a one-year truce in their trade dispute: the United States lowered fentanyl-related tariffs on Chinese goods to 10%, while China simultaneously paused its rare-earth export controls and resumed purchases of US soybeans, ending an earlier round of tit-for-tat tariff escalation in which rates on both sides had at one point exceeded 100%. Entering 2026, the relationship went through further ups and downs. That May, Trump visited Beijing, and the two sides agreed to discuss a reciprocal tariff-reduction arrangement under a "China-US trade council" framework, initially aiming to identify tariff cuts covering goods worth $30 billion or more on each side; the US Trade Representative's office said at the time that the talks were focused on stabilizing the relationship rather than seeking major breakthroughs. Later, US Treasury Secretary Scott Bessent disclosed that the two sides had agreed to extend the trade truce by another two months to allow more time for a larger agreement, pushing the truce deadline to around January 10, 2027.

The real breakthrough came in September 2026, when Xi traveled to Washington for a return visit and held a three-day summit with Trump. According to reports, the two sides reached an "eight-point consensus" at the summit, including the establishment of a standing "US-China Board of Trade" as a platform for future consultations on tariffs and other trade disputes, alongside the launch of a parallel dialogue mechanism on artificial intelligence. Ahead of the summit, trade teams from both countries held several rounds of working-level consultations in Kuala Lumpur to lay the groundwork for the summit's outcomes, and the two sides used the occasion to confirm they would carry forward the results of earlier rounds of talks rather than let the negotiations slip backward. US Trade Representative Jamieson Greer described the tariff-reduction lists as focused on "nonsensitive goods on each side that could benefit from more favorable tariff treatment," saying the arrangement could open more favorable market access for roughly 30% of US exports to China. China's Ministry of Commerce said the newly established trade board would provide "an important platform and institutional guarantee" for deepening bilateral economic and trade cooperation.

On September 28, the US and China each published their own lists of goods eligible for tariff cuts, giving concrete shape to the agreement. The US list covers 77 categories of Chinese goods, including fireworks, household goods, sporting goods, toys, tableware, glass and wooden Christmas ornaments, and soccer balls. China's list is broader, covering 1,619 items of US goods, including meat, seafood, dairy products, grains such as corn, wheat and sorghum, as well as vegetable oils, feed ingredients, timber and medical devices. China's Ministry of Commerce said that for more than 90% of the goods on the lists, the additional tariffs the two sides had imposed on each other would be canceled and ordinary most-favored-nation rates would apply instead, meaning the actual tariff burden on those goods would fall significantly. Both countries said the lists could be adjusted in the future based on circumstances, with revisions expected to occur annually.

Before formally announcing the lists, China's Ministry of Commerce also publicly solicited comments on the proposed tariff-reduction list, in order to assess the potential impact on relevant industries and businesses, before finalizing and releasing the final version. Outside observers interpreted this procedural step as a sign that China wanted to thoroughly assess the capacity of domestic industries before implementing the tariff cuts, so as to avoid pushback at the implementation level once the policy took effect. Analysts said this "list-based, incremental" approach to adjusting tariffs, compared with the pattern in 2025 when both sides repeatedly imposed retaliatory tariffs on each other, suggests that both countries' strategies for managing trade friction have become more pragmatic and more controlled.

However, the lists also leave several issues unresolved. US soybeans, closely watched by markets, were not included in China's tariff-reduction list, and the additional 10% tariff on US soybeans will remain in place — underscoring that the most sensitive issue in US-China agricultural trade has not been substantively resolved. At the same time, goods in strategic sectors such as semiconductors, electric vehicles and batteries were not included in this round of tariff cuts, and more sensitive issues such as advanced-technology export controls and the Taiwan question were set aside and not addressed in this round of the agreement. Analysts noted that this suggests the current tariff cuts are more of a "tentative" gesture of goodwill in non-core, non-sensitive areas, rather than an end to the broader trade conflict.

Assessments of the deal's actual economic impact vary. According to Bloomberg, the arrangement was seen as one of the most concrete economic achievements of this Xi-Trump summit, but the roughly $60 billion in bilateral trade it covers is only a small fraction of the approximately $415 billion in total US-China bilateral trade last year, meaning its symbolic significance may outweigh its practical economic impact. An analyst at ING said that given Trump and Xi's plans for further meetings, they do not expect a major deterioration in US-China trade relations before the end of the year, though the underlying sources of trade tension — including structural trade imbalances and technology export controls — remain unaddressed.

It is worth noting that, at the same time, the US is continuing a Section 301 investigation into 16 trading partners, including China, focused on alleged industrial "overcapacity." Once that investigation concludes, it is possible that new tariffs could be imposed on Chinese goods, meaning that even after this tariff-reduction agreement takes effect, the US-China trade relationship still carries the risk of renewed friction.

Looking ahead, the newly established US-China Board of Trade is set to become the main platform for further consultations on tariff reductions and other trade disputes between the two sides. Analysts generally agree that this agreement, covering roughly $60 billion in goods, marks a shift in US-China trade relations from last year's intense confrontation toward a new phase of "limited easing" — but core disputes such as soybeans, advanced technology industries and export controls remain unresolved. Whether the two sides can make further progress under the Board of Trade framework in the coming months will be an important signal to watch in the trajectory of US-China economic and trade relations.