US, China eye limited tariff rollback through new trade mechanism ahead of Trump-Xi summit

The United States and China are expected to move this week toward a new mechanism aimed at easing trade restrictions on selected non-sensitive goods, in a shift toward more targeted economic engagement ahead of a summit between President Donald Trump and Chinese President Xi Jinping.

According to a Reuters report, officials from both countries may identify roughly $30 billion worth of goods on each side that could be traded with lower tariffs without raising national security concerns.

The proposed arrangement, informally referred to by US officials as a “Board of Trade,” was first outlined by US Trade Representative Jamieson Greer in March as a potential deliverable for the leaders’ meeting.

Unlike earlier negotiations, the initiative does not seek broad structural changes to China’s state-led economic model. Instead, it focuses on numerical trade targets in sectors considered outside strategic competition, while preserving existing tariffs and export controls on sensitive technologies.

US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng met in Incheon, South Korea, on Wednesday to prepare economic proposals for the summit.

People familiar with the discussions said the two sides were considering reciprocal tariff reductions covering approximately $30 billion in goods, although specific product categories may be finalized later.

Wendy Cutler, a former US trade negotiator, said both countries appear to be converging on a basket of goods worth between $30 billion and $50 billion that could be subject to lower tariffs and other reduced trade barriers.

The prospective deal is expected to focus heavily on US exports of energy and agricultural products, sectors currently subject to Chinese retaliatory tariffs, including duties of 10 percent on crude oil, 15 percent on liquefied natural gas and coal, and up to 55 percent on beef.

US-China goods trade fell 29 percent to $415 billion in 2025 from $582 billion in 2024, according to US Census Bureau data cited by Reuters, while the US trade deficit with China narrowed nearly 32 percent to $202 billion, the lowest level in two decades.

The two governments are also expected to discuss a separate “Board of Investment” concept to address investment issues, though US officials have indicated there is little appetite at present for large-scale bilateral investment initiatives.