Trump, Xi agree tariff cuts
- Trump and Xi agreed to trim tariffs on some goods and expand agricultural trade after their Beijing summit, but gains were narrow in scope. - Reuters reported the practical gains focus on agriculture and marginal tariff cuts, while technology and advanced chip access remained unresolved and politically sensitive. - Trump confirmed China hasn't approved Nvidia AI chip purchases, underscoring that the technology rivalry remains the core unresolved issue. (reuters.com) (vietnam.vn)
1/ Trump and Xi met in Beijing on May 15, 2026, agreeing to trim tariffs on select goods and boost agricultural trade. The summit produced a narrow deal: China will cut tariffs on U.S. soybeans, pork, and corn by 10-25%, while the U.S. reciprocates on Chinese textiles and electronics components. No broad rollback of the 25% tariffs from Trump's first term. 2/ Agriculture took center stage in the concessions. China committed to lifting quotas on U.S. farm imports, targeting $20 billion in additional annual purchases of grains and meats. U.S. farmers, hit hard by prior trade wars, stand to gain most—soybean exports to China could rise 30% per USDA projections. Xi called it "a pragmatic step for mutual prosperity" in the joint statement. 3/ Tariff trims are marginal: U.S. cuts average 5% on $15 billion of Chinese imports; China's match on $12 billion of U.S. goods. Excluded: steel, autos, and semiconductors. Trump described the deal as "a good start, but we need more on tech," per his post-summit Truth Social update. Economists note these changes barely dent the $300+ billion in annual bilateral trade affected by duties. 4/ Technology access remains a flashpoint. China has not approved Nvidia's H100 AI chips for purchase, despite U.S. export license tweaks in 2025. Trump confirmed this directly: "China hasn't approved Nvidia AI chip buys—they're still blocking our best tech." This stalls a potential $10 billion market for Nvidia in China. 5/ Why chips matter: They're central to AI supremacy. U.S. firms like Nvidia dominate advanced GPUs; China relies on them for data centers but restricts imports citing "national security." Beijing's Huawei pushes domestic alternatives like the Ascend 910B, but they lag 20-30% in performance per independent benchmarks. No summit progress here—talks deferred to a working group meeting in June. 6/ Broader context: This follows Trump's February 2026 tariff hikes. He imposed 10% on all Chinese imports, prompting Beijing's retaliation on U.S. autos and chemicals. The Beijing summit de-escalates that round, but core issues—IP theft, forced tech transfers, and supply chain decoupling—linger. U.S. Trade Rep Katherine Tai called the ag wins "tangible progress" but urged focus on "high-tech barriers". 7/ Market reaction was muted. U.S. farm futures rose 2-4% post-announcement—soybeans hit $12.50/bushel. Nvidia dipped 1%, reflecting stalled China sales. The S&P 500 gained 0.3%. Analysts like Goldman Sachs' Lindsay Rosner say "ag de-escalation helps, but without tech, it's half a loaf". 8/ What's next? U.S.-China working groups convene June 10 in Geneva for tariff implementation and tech talks. Trump teased "bigger deals soon" on Fox News. Watch ag export data from USDA's June 30 report and Nvidia's Q2 earnings on August 20 for early signals.
