U.S. and China Swap Tariff Cuts on $30 Billion of Goods Each Way

The United States and China released reciprocal tariff-cut lists on Monday covering products worth roughly $30 billion on each side, a deal expected to boost bilateral trade between the world's two largest economies.

The announcement came days after Chinese President Xi Jinping met President Donald Trump in Washington on Xi's first state visit to the U.S. since 2015. The U.S. had already rolled back tariffs on Chinese goods after Trump's levies spiked as high as 145% at one point last year and tensions eased. China's commerce ministry said in a statement the agreement will help strengthen trade cooperation.

Most country-specific tariffs practically eradicated

China's list covers 1,619 items of U.S. goods, ranging from agricultural commodities and personal care products to timber, medical equipment and coal. The U.S. list for Chinese goods spans 77 categories, including fireworks, tableware, glass, wooden Christmas ornaments and soccer balls.

Tariff rates on over 90% of the products will drop to "most-favored-nation" levels, according to the Chinese commerce ministry, effectively eliminating country-specific tariffs.

U.S. Trade Representative Jamieson Greer said in a separate statement that the product lists focused on "nonsensitive goods on each side that could benefit from more favorable tariff treatment." The deal could help secure market access for U.S. farmers, manufacturers, businesses and workers, while benefiting American consumers through imports from China including household goods and toys, Greer said.

Both countries agreed the lists may be adjusted later, but amendments will likely occur no more than once a year. The Chinese commerce ministry said the two sides also agreed to deepen agricultural cooperation through a group under the Board of Trade established in May. Sectors of strategic importance, such as chips, electric vehicles and batteries, remain outside the agreement.

A potential boost to U.S.-China bilateral trade

"This is a positive outcome for these affected products compared to a smaller tariff cut, and could lead to a more significant boost to bilateral trade," said Lynn Song, chief economist for Greater China at ING Bank.

The reduced tariffs could benefit U.S. consumer brands, added Jacob Cooke, CEO of Beijing-based WPIC Marketing + Technologies, since China's list of U.S. imports includes fast-growing categories like hair care, personal care products and infant formula.

The U.S. list for Chinese imports leans toward consumer goods, which could help lower U.S. inflation while letting Chinese firms export more of their overcapacity, said Gary Ng, senior economist at French bank Natixis.

Some experts caution the economic impact of $30 billion each way may be limited. U.S. exports to China ran roughly $68 billion through the first seven months of this year, while Chinese exports to the U.S. reached about $270 billion in the first eight months, according to Prashant Bhayani, chief investment officer for Asia at BNP Paribas Wealth Management. A $30 billion deal each way will be "more meaningful" for U.S. exports to China in percentage terms, he said.

China's trade surplus expected to remain elevated

Although the deal excludes sensitive strategic goods, analysts expect U.S.-China trade to keep recovering through year-end after steep U.S. tariffs last year hit bilateral flows. Washington and Beijing also agreed last week to extend the broader trade truce, which was set to expire Nov. 10, by two months into January.

China's trade surplus, which hit a record $1.2 trillion last year, will likely stay elevated. By August it stood at about $800 billion, putting this year's surplus "on pace to exceed the 2025 record," according to Ecaterina Bigos, senior market strategist at BNP Paribas Asset Management.

Risks remain. The U.S. is investigating China among 16 trading partners in its Section 301 probe into excess industrial capacity and could impose additional tariffs when the probe concludes. But with further meetings scheduled between Trump and Xi — at the Asia-Pacific Economic Cooperation summit in Shenzhen in November and the Group of 20 summit in Florida in December — Song at ING said he would not expect a major flare-up of trade tensions before year-end.

Exporters welcome the tariff deal

Some Chinese exporters greeted the announcement with relief.

"This is positive news," said Richard Chan of Golden Arts Gifts & Decor, which manufactures Christmas decorations in southern China and supplies countries including the U.S. "The economy in both the U.S. and China is not really good, and the two sides should help each other more."

The immediate effect for his industry may be muted: most of this year's Christmas goods are already shipping ahead of the peak holiday season, so the tariff reductions will do little for exporters at least for now.