$30bn tariff-cut proposal surfaces during Trump–Xi Beijing talks

President Donald Trump and Chinese President Xi Jinping opened a two-day summit in Beijing on Thursday with trade, tariffs and security on the agenda, as officials from both governments discussed a narrower tariff-cut package aimed at restarting commerce in selected goods. Reuters reported on May 13 that the two sides were weighing a managed-trade mechanism covering about $30 billion of imports from each country, focused on products that would not cross national-security red lines. Trump told Xi in opening remarks carried by official Chinese media that the relationship would be “better than ever before,” while Xi said the meeting had drawn global attention. The proposal under discussion is far smaller than the trade relationship the two countries once had. Reuters reported that bilateral trade fell to $414.7 billion in 2025 from $690.4 billion in 2022, underscoring how tariffs and export controls have cut into flows between the world’s two largest economies. Wendy Cutler, a former U.S. trade negotiator who now heads the Asia Society Policy Center, told Reuters the two sides were “coalescing around” a $30 billion to $50 billion basket for reduced tariffs or other barriers. (usnews.com) ### What exactly is the tariff-cut idea on the table? Reuters reported that U.S. and Chinese officials were considering what one U.S. official has called a “Board of Trade” approach: each side would identify goods that can still be sold without triggering national-security objections, then lower tariffs or other barriers on that list. Four people familiar with the Trump administration’s objectives told Reuters they expected a $30 billion-for-$30 billion framework arrangement to launch the mechanism, although they said it was unclear whether Trump and Xi would name specific goods in Beijing. (usnews.com) Jamieson Greer, the U.S. trade representative, described the concept in an interview with Fox Business last week, according to Reuters. Greer said the goal was not to make China change how it governs its economy, but to find areas where the two sides could “optimize trade” and achieve more balance. Reuters said he compared the mechanism to an “adapter” linking two different economic systems. (usnews.com) ### How does this differ from the tariff truce reached last year? On May 12, 2025, Washington and Beijing issued a joint statement after talks in Geneva laying out a 90-day suspension of part of the new tariff increases imposed that spring. The White House said the United States would suspend 24 percentage points of certain additional duties while retaining a 10% rate, and China would make corresponding changes on U.S. goods while removing specified non-tariff countermeasures. (usnews.com) The statement also created a mechanism for continued talks led by Vice Premier He Lifeng on the Chinese side and Treasury Secretary Scott Bessent and Greer on the U.S. side. The current Beijing discussions appear narrower and more selective. Reuters reported that broad tariffs and export controls on security-sensitive technologies would remain in place even if the two governments agree to lower barriers on a limited basket of non-sensitive products. ### Why are both sides focusing on “non-sensitive” goods? (whitehouse.gov) China’s Commerce Ministry said on Feb. 26, 2026 that the United States had stopped collecting certain tariffs imposed under the International Emergency Economic Powers Act and had begun applying a 10% import surcharge under Section 122 of the Trade Act of 1974. The ministry said China was assessing whether to adjust its countermeasures and repeated its opposition to unilateral tariffs, while also saying it was prepared for a sixth round of economic and trade talks. (usnews.com) The trade damage has been substantial. Chad Bown of the Peterson Institute for International Economics wrote in March that U.S. tariffs on China rose by 145 percentage points by April 2025 and that U.S. imports from China had fallen sharply by mid-2025, while some supply chains shifted to countries including Vietnam, Taiwan and Mexico. Bown also wrote that China had used export restrictions on key inputs, including rare-earth magnets and some semiconductors, during the confrontation. (english.mofcom.gov.cn) ### Who has been doing the negotiating before Trump and Xi met? Scott Bessent and He Lifeng met for about three hours in Incheon, South Korea, on Wednesday to prepare economic proposals for the Beijing summit, Reuters reported. Reuters said the two officials did not issue statements after that meeting. The presidents are scheduled to continue discussions through Friday. (piie.com) CNBC reported that Trump and Xi were set for multiple meetings, with Trump also due to attend a state banquet in Beijing on Thursday evening before further talks on Friday. (cnbc.com) (usnews.com)