China signals tariff flexibility in talks

China signaled this week that it is prepared to live with some higher U.S. tariffs if that helps preserve a broader trade truce with Washington. The signal came as both governments moved to keep talks alive after last week’s Trump-Xi summit, even as Treasury Secretary Scott Bessent said the United States was “not in a rush” to renew the current tariff and critical-minerals arrangement before it expires in November. (bloomberg.com) Bloomberg reported that Beijing would accept some increase in U.S. tariffs up to a level agreed last year while continuing negotiations on an extension. (usnews.com) Reuters reported that Bessent, speaking in Paris on May 19, said there was still time to revisit the deal later in 2026. (en.bloomingbit.io) ### What exactly did China put on the table? China’s Commerce Ministry said trade teams from both countries would discuss extending the one-year agreement negotiated in Kuala Lumpur, according to Bloomberg’s report as reflected in search results and follow-on coverage. Bloomberg said Beijing indicated it would accept some increase in U.S. tariffs to a level agreed upon last year rather than treat any increase as a reason to abandon the truce. The proposal keeps the focus on limits, not a full rollback. Bloomberg’s account said China was seeking an extension of the truce while setting a ceiling around Section 301 tariff levels previously negotiated, a sign that Beijing is trying to preserve predictability in trade terms even if tariffs do not return to pre-conflict levels. (bloomberg.com) ### Why did Bessent say Washington is not rushing? Scott Bessent told Reuters on May 19 that the Trump administration was “not in a rush” to extend the tariff and critical-minerals truce because meetings later this year still leave time for renewal before the November deadline. Reuters said Bessent gave the interview on the sidelines of a G7 finance ministers’ meeting in Paris. (bloomberg.com) Paris was also where Bessent indicated he believed China would accept the restoration of prior U.S. tariff levels, according to Reuters-syndicated excerpts carried by other outlets. That comment matters because it shows Washington is not presenting an extension as automatic or urgent, even while keeping the negotiating channel open. (bloomberg.com) ### What are the two sides still bargaining over? A separate report circulated on May 20 said the United States and China would jointly discuss matching tariff cuts covering about $30 billion of goods. The same report said rare earths and other critical-minerals export controls were also on the agenda for the trade committee reviewing the next steps. (usnews.com) Reuters reported ahead of the summit that the possible tariff reductions would apply to non-sensitive goods and would be structured around equal-value lists from each side. That framing shows how narrow the current talks remain: the governments are discussing selected goods and strategic inputs, not a broad dismantling of trade barriers. (democraticunderground.com) ### Why are rare earths tied to a tariff truce? Rare earths and other critical minerals were written into the current truce alongside tariffs, according to Reuters’ May 19 report on Bessent’s remarks. Bessent said Beijing was satisfactorily fulfilling the conditions on critical minerals, as reflected in Reuters-sourced follow-on coverage. (en.bloomingbit.io) The link gives both governments leverage beyond customs duties. China remains a major supplier of rare earth processing and related materials, while the United States has used tariff relief and other trade concessions as part of the negotiating package. The result is that minerals access and tariff levels are being handled in the same set of talks. (usnews.com) ### What happens before November? November is the next hard date because that is when the current tariff and critical-minerals truce expires, according to Reuters. Bessent said the deal could be renewed in meetings later this year, while Bloomberg reported that Chinese and U.S. trade teams would continue discussing an extension. (usnews.com) The trade committee is also expected to keep reviewing possible tariff cuts on roughly $30 billion of goods and the treatment of rare earth export controls, according to the May 20 report on the talks. Those discussions, along with any follow-up meetings between U.S. and Chinese officials, are the next named steps before the November deadline. (en.bloomingbit.io) (usnews.com)