Trump, Xi weigh $30bn tariff cuts
- Presidents Trump and Xi discussed cutting tariffs on about $30 billion of non‑sensitive imports as part of a managed-trade approach during their Beijing summit. - U.S. and Chinese officials framed the talks as stabilisation rather than a return to pre‑war trade, with analysts calling it an 'extended truce.' - Partial tariff relief could lower some input costs while leaving strategic controls in place, keeping origin exposure a policy risk for buyers. (reuters.com) (apnews.com) (cnbc.com)
President Donald Trump and Chinese President Xi Jinping used their Beijing summit on May 14 to test a limited tariff rollback, not a broad reset of the trade war. The proposal under discussion, according to Reuters, would trim duties on roughly $30 billion of what officials described as non-sensitive imports while leaving tighter controls on strategic sectors in place. CNBC, citing summit coverage and official readouts, reported that both sides framed the meeting around “stabilization” and “strategic stability,” language that suggested a managed relationship rather than a return to pre-tariff trade. (cnbc.com) The number to watch is the roughly $30 billion figure because it shows how narrow the possible relief is. Reuters reported that the cuts being weighed cover only a slice of bilateral trade and are tied to a managed-trade approach, with Chinese purchases of U.S. goods still central to the talks. Ahead of the meeting, CNBC reported that the White House was pressing China for more purchases of U.S. soybeans, Boeing aircraft and other goods, while Beijing signaled that Taiwan and broader strategic issues would remain on the agenda. (cnbc.com) That is why analysts described the summit less as reconciliation than as an effort to stop relations from worsening. Graham Allison of Harvard told CNBC that “the big word will be stabilization,” while James Zimmerman, chairman of AmCham China, said it made no sense for the two countries to keep escalating trade retaliation. Tianchen Xu of the Economist Intelligence Unit said the outcome pointed to “managed stability” with frictions still in place. Those comments match the official messaging from Beijing and the White House, which emphasized guardrails, communication channels and selective economic cooperation. (cnbc.com) For companies, the practical effect is narrower than a headline about tariff cuts might suggest. If duties are reduced on a defined list of non-sensitive goods, some manufacturers and importers could see lower input costs on those categories. But the same summit agenda kept rare earths, artificial intelligence, export controls and Taiwan at the center of the relationship, meaning the policy risk around sourcing from China does not disappear. CNBC reported that tariffs, rare earths and AI were all expected to be part of the talks, alongside the Iran war and Taiwan. (cnbc.com) The summit also showed how trade is now bundled with geopolitics. CNBC reported that Trump arrived in Beijing with executives including Tesla’s Elon Musk and Nvidia’s Jensen Huang, underscoring how closely business interests, technology controls and diplomacy are now linked. Beijing’s official readout, as summarized by CNBC, said Xi and Trump agreed to pursue a “constructive China-U.S. relationship of strategic stability,” while also discussing deeper cooperation in trade, agriculture and tourism. (cnbc.com) What comes next is likely to be handled by negotiators rather than the two leaders alone. CNBC reported that a preparatory meeting in South Korea was led by U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, and Xi said both sides should preserve that “positive momentum.” Trump was scheduled to remain in Beijing through Friday, May 15, for additional meetings including tea and a working lunch with Xi, where any concrete tariff list or purchase commitments could become clearer. (cnbc.com)
