US and China strike tariff deal on $60bn of goods, easing trade tensions
In a move that could steady global markets and ease the cost of everyday goods, China and the United States have agreed to cut tariffs on $60 billion worth of each other's products. The deal, announced under the US-China Board of Trade, covers everything from American corn and cosmetics to Chinese toys and household appliances.
Each side has recommended $30 billion of non-sensitive goods for more favourable tariff treatment, according to US Trade Representative Jamieson Greer. For Washington, this means improved market access for roughly 30% of US exports to China, a significant step in a relationship that has been strained by years of trade friction.
The tariff reductions follow the second summit this year between President Xi Jinping and President Donald Trump, hosted in Washington last week. Alongside the tariff cuts, the two leaders extended a trade truce for two more months, through to January 10, giving both sides breathing room to assess their ongoing arrangement.
What goods are included in the tariff cuts?
China's list focuses heavily on agricultural products. Beijing plans to trim duties on US corn, wheat, sorghum, meat, dairy, vegetable oils, and meals. Notably, soybeans are not included, though China has already resumed large-scale purchases under a separate deal to buy 25 million metric tons annually.
Other US products set for lower tariffs include fish and seafood, logs and wood products, cosmetics, and medical devices. For Chinese exporters, Washington will cut tariffs on small appliances like coffee makers and toasters, tableware, blankets, bed linens, toys, fireworks, artificial flowers, and Christmas decorations, as well as children's car seats.
Why does this matter for ordinary people?
Tariff cuts can translate into lower prices on shelves, from holiday decorations to kitchen gadgets. For farmers and manufacturers on both sides, it opens up markets that had been closed or costly. The deal also signals a willingness to cooperate, even as underlying tensions remain over technology and investment.
China's commerce ministry said the extension of the trade truce provides a relatively stable and predictable policy environment for companies, allowing for continued cooperation and dialogue. Both sides will hold regular talks on investment opportunities and barriers, aiming to enhance transparency and respond to enterprise concerns.
What about agriculture, coal, and AI?
Beyond tariffs, the summit yielded an agreement for China to import 10 million metric tons of US coal annually in 2027 and 2028, roughly 2% of China's yearly coal imports. The Chinese ministry called it a beneficial supplement to its domestic market, while bringing stable income and employment to the US coal industry.
An agriculture working group will be set up under the trade council, with its first meeting before year's end to discuss market access and regulation. On artificial intelligence, both sides agreed to a communication channel for incidents and will hold a follow-up dialogue by the end of November.
China will also examine and approve foreign financial services institutions, including those with US capital, to operate and open branches. And there will be continued talks on increasing direct flights between the two countries.
What happens next?
Markets reacted cautiously on Monday, with Chinese stocks falling sharply as investors sought more concrete details from the summit. The benchmark blue-chip index slid over 2% to a one-year low, while technology stocks were hit by a bipartisan US push to ban Chinese components from data centres.
Yet the tariff deal and extended truce offer a measure of predictability. For businesses and consumers, the next two months will be telling. If the arrangement holds, we could see a more stable trade environment heading into 2027. If not, the underlying tensions will likely resurface.
As with any such agreement, the proof will be in the implementation. But for now, the door is open, and that is a start.