Trump, Xi to weigh tariff cuts on $30 billion of imports in managed trade push

• U.S.-China bilateral goods trade fell 29% to $415 billion in 2025 from $582 billion in 2024, with the U.S. trade deficit dropping 32% to $202 billion, its lowest level in two decades
• Potential tariff reductions may focus on U.S. energy and agricultural exports to China, where Beijing currently imposes retaliatory duties of 10% on crude oil, 15% on LNG and coal, and up to 55% on beef
• U.S. Trade Representative Greer describes the mechanism as a plug 'adapter' connecting incompatible economic systems, abandoning previous demands for China to adopt market-oriented reforms in favor of balanced trade in non-strategic goods

Summary: Trump-Xi Trade Talks Target $30 Billion in Tariff Reductions

The U.S. and China are negotiating a managed trade framework that would reduce tariffs on approximately $30 billion worth of non-sensitive goods from each side, marking a significant shift in Washington's approach to bilateral trade relations.

Key Developments:

U.S. Trade Representative Jamieson Greer proposed a "Board of Trade" mechanism in March, which abandons previous demands for China to reform its state-directed economic model. Instead, the focus shifts to numerical trading targets in non-strategic sectors while maintaining broad tariffs on national security-sensitive technologies.

Market Context:

U.S.-China bilateral trade fell 29% to $415 billion in 2025 from $582 billion in 2024. The U.S. trade deficit with China dropped nearly 32% to $202 billion—its lowest level in two decades.

Trade Barriers:

China currently maintains a 10% extra tariff on all U.S. imports, plus retaliatory duties including 10% on crude oil, 15% on LNG and coal, and up to 55% on beef. The U.S. applies 7.5% tariffs on various Chinese consumer goods from 2019, plus a temporary 10% global tariff expiring in July.

Sectors in Focus:

Energy and agriculture are priority areas for increased U.S. exports. Potential tariff reductions could target consumer electronics, footwear, and industrial equipment. The U.S. may resurrect over 2,200 product-specific tariff exclusions from Trump's first term.

Investment Concerns:

A proposed "Board of Investment" faces opposition from U.S. lawmakers and industry groups, particularly regarding potential Chinese investment in the automotive sector, citing concerns about hollowing out U.S. manufacturing capabilities.

Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng met for three hours in South Korea to finalize proposals ahead of the Trump-Xi summit.