Trump, Xi weigh $30B tariff cuts

President Donald Trump and Chinese President Xi Jinping opened talks in Beijing on Thursday with trade officials discussing possible tariff cuts on about $30 billion of goods and a framework to restart some non-sensitive commerce. The meeting, held at the Great Hall of the People on May 14, put trade back at the center of a relationship also strained by Taiwan, export controls, rare earths and the war in Iran. Reuters reported that officials from both sides were weighing a managed-trade approach aimed at identifying products they could sell to each other without crossing national-security red lines. CNBC reported that the summit was expected to run over two days and include tariffs, rare earths, artificial intelligence and Taiwan on the agenda. ### Why are Trump and Xi talking about only part of the trade relationship? The proposed tariff cuts cover roughly $30 billion of imports, not the full flow of U.S.-China trade, according to Reuters. The idea under discussion is to carve out a channel for goods deemed non-sensitive while preserving restrictions tied to security concerns, including advanced technology and strategic materials. (usnews.com) U.S. Trade Representative Jamieson Greer first raised the idea of a “Board of Trade” in March, Reuters reported, as a way to manage disputes and keep lower-risk commerce moving. That would mark a narrower approach than earlier trade negotiations that sought broader market-opening commitments across the relationship. (usnews.com) ### What kinds of goods are likely to be included? Reuters reported that the working assumption is that both governments would identify goods they can trade “without crossing national security red lines.” That points away from semiconductors, military-linked technologies and other sectors already constrained by export controls, and toward more routine industrial or consumer categories still subject to tariffs from earlier rounds of the trade war. (usnews.com) The United States still has 7.5% tariffs on a range of Chinese consumer products imposed in 2019, according to Reuters. Those legacy duties give both sides room to offer limited relief without reopening the entire tariff structure built during Trump’s first term. ### What remains outside any tariff deal? Taiwan remained one of the most sensitive issues in Beijing. (usnews.com) CNBC reported that Xi used some of his strongest language of the summit so far on Taiwan, calling it the most important issue in the bilateral relationship. Rare earths, artificial intelligence and broader technology controls were also expected to remain on the agenda alongside trade. (oilandgas360.com) CNBC also reported before the summit that Iran and the Strait of Hormuz crisis could compete for attention with business issues such as rare earths and supply chains. That wider agenda helps explain why trade officials appear to be pursuing a narrower package rather than a larger settlement. ### Why are companies watching this so closely? (cnbc.com) Business leaders joined Trump’s China trip as companies looked for signs of relief from tariffs and supply-chain restrictions. CNBC reported that executives invited on the trip included Tesla’s Elon Musk, Apple’s Tim Cook and BlackRock’s Larry Fink. For companies that import consumer goods, components or industrial inputs, even a limited reduction in tariffs could lower costs on a defined set of products. (cnbc.com) For manufacturers that depend on restricted inputs such as rare earths, the summit matters because trade relief on ordinary goods would not necessarily resolve bottlenecks in strategic materials, as Reuters and CNBC separately reported. (cnbc.com) ### What should readers watch after the Beijing meeting? The next concrete sign of progress will be whether U.S. and Chinese trade officials identify the product lists that make up the roughly $30 billion under discussion. Reuters reported that the proposed mechanism would center on a “Board of Trade” for non-sensitive goods, which would give both sides a formal channel to keep those flows moving. (money.usnews.com) The Beijing summit was expected to continue into a second day on May 15, CNBC reported. Any joint statement, tariff list or announcement involving Trump, Xi, or trade officials such as Jamieson Greer would provide the next test of whether the talks produce a limited trade package. (cnbc.com) (usnews.com)