China and US Agree to Tariff Cuts on US$60Bn of Goods

  • China and the United States said they will pursue tariff cuts on US$60Bn worth of goods imported from each other, covering products ranging from US agricultural goods and cosmetics to Chinese toys and household appliances. Each country identified around US$30Bn of non-sensitive goods for more favourable tariff treatment.
  • For the US, the agreement could improve market access for around 30% of US exports to China, according to US Trade Representative Jamieson Greer. China plans to reduce duties on US products including corn, wheat, sorghum, meat, dairy, vegetable oils and meals, as well as fish and seafood, wood products, cosmetics and medical devices.
  • However, US soybeans were excluded from China’s tariff-reduction list, despite being the country’s largest agricultural export to China at US$16.2Bn in 2025. The American Soybean Association expressed disappointment, while soybean futures fell following the announcement.
  • The US, meanwhile, proposed reciprocal tariff cuts on a range of Chinese consumer goods, including small appliances, tableware, blankets, bed linens and toys. The toy category alone accounted for US$14.4Bn of US imports from China in 2024, before falling to US$9.8Bn in 2025 amid higher tariffs.
  • The tariff reductions were among the key outcomes of last week’s meeting between President Donald Trump and President Xi Jinping. The countries also extended their trade truce by two months to January 10, 2027, with China saying the extension provides a more stable and predictable policy environment for companies and continued negotiations.
  • The two sides did not specify the size of the tariff reductions or when they will take effect. They also agreed to establish an agriculture working group, while China committed to import 10Mn metric tons of US coal annually in 2027 and 2028.
  • The agreement represents a further easing in US-China trade tensions and could support bilateral trade by improving market access for selected goods. However, the absence of implementation dates and tariff-rate details, along with the exclusion of major products such as US soybeans, suggests the near-term economic impact may remain limited.

(Source: Reuters)