China and US Cut Tariffs on $60 Billion in Goods as Trade Truce Extends
China and the US agree to slash tariffs on $60 billion in goods, including agriculture, home products, coal, artificial intelligence talks and financial services.
Raja Awais Ali
9/28/20264 min read
China and US Cut Tariffs on $60 Billion in Goods as Trade Truce Deepens
China and the United States have agreed to reduce tariffs to about $60 billion in goods exchanged between the two countries, covering numerous agricultural products, consumer goods and toys. The deal follows years of tariff battles, export bans and disagreements between Washington and Beijing over technology and trade rules.
Each country has committed to remove tariffs on about $30 billion in non-sensitive goods. The United States said the measures would benefit a broad range of its exported goods to China, while Chinese officials welcomed the agreement as a means of establishing a more predictable trade environment.
The deal followed Chinese President Xi Jinping’s visit to Washington and his September 24 meeting with US President Donald Trump. The two leaders’ latest summit included multiple trade-related understandings, including the latest tariff agreement, an extension of the trade truce, increased cooperation on agricultural and investment issues, and new channels for discussing emerging technologies.
China’s tariff reductions will apply to numerous agricultural products from the United States, including corn, wheat, sorghum, meat, dairy products, vegetable oils and meals. Beijing has also agreed to more favorable treatment for American fish and seafood, logs and wood products, cosmetics and medical devices. Soybeans, however, were not included in the newly-released list of agricultural products eligible for tariff reductions.
The United States will also reduce tariffs on some Chinese goods, including small home appliances such as coffee makers and toasters, tableware, blankets and bed linens. Toys, fireworks, artificial flowers, Christmas tree lights, holiday decorations and children’s car seats will also benefit from the latest tariff reductions. US government documents reveal extensive categories of consumer goods deemed non-sensitive for the purposes of the agreement.
The tariff deal is part of a larger effort to avoid the resumption of the highly-charged trade war between the world’s two largest economies. Upon taking office for the second time, President Donald Trump imposed additional tariffs on Chinese imports, prompting Beijing to impose tariffs and other trade measures on American goods. The confrontation intensified in April 2025 as Washington and Beijing imposed escalating tariffs on each other and imposed additional restrictions on strategically significant goods.
The two sides then began negotiating and establishing temporary trade measures to avoid renewed hostilities. Meetings in Geneva and subsequent summits produced steps aimed at reducing immediate tensions while leaving broader disagreements unresolved. In May 2026, the two governments created the US-China Board of Trade and Board of Investment, which began facilitating ongoing economic discussions. The meeting between the two presidents in September took the negotiations to a new level.
The latest trade truce has been extended until January 10, 2027. China’s Commerce Ministry said the extension would allow time for the two sides to evaluate the implementation of the existing measures and continue discussing unresolved economic and trade issues. Beijing said the extension would create a relatively stable and predictable policy environment for businesses while negotiations continued.
Agriculture continues to be a major area of concern in the US-China trade relationship. Washington has sought to persuade Beijing to make additional purchases of American agricultural products, including under agreements involving billions of dollars of purchases per year. The two sides have launched an agricultural working group to discuss market access and regulations affecting the agricultural sector. It will hold its first meeting before the end of 2026.
Soybeans continue to play a special role in the agricultural relationship between the two countries. Earlier agreements included a commitment by China to purchase 25 million metric tons of US soybeans annually, while the United States has also cited a separate commitment by Beijing to make purchases of other agricultural products worth about $17 billion per year. The latest list of tariff reductions, however, does not include soybeans among the eligible products.
Coal is another important area of the latest agreement. China has committed to purchase at least 10 million metric tons of US coal per year in both 2027 and 2028. The agreement will provide an additional export opportunity for US coal producers while also creating an alternative supply source for Chinese purchasers. Oil and liquefied natural gas, however, were not included among the products eligible for the latest tariff reductions.
Beyond tariffs, the two sides have agreed to expand economic dialogue in other areas, including an investment council to discuss investment-related opportunities and barriers for businesses in both countries. Beijing has also pledged to review and approve foreign financial-services institutions, including those with US capital, to operate and open branches in China. The two sides continue to discuss the expansion of direct flights between the two countries.
Artificial intelligence has become another area of discussion, in addition to the broader technology competition between the United States and China. The two sides have created an AI dialogue and agreed to establish a bilateral channel for discussing AI-related incidents. Another round of discussions is expected to take place before the end of November 2026. The talks follow ongoing competition between the two governments over advanced chips, AI capabilities and technology supply chains.
The latest agreement does not resolve the most serious disagreements between the two countries. Washington and Beijing continue to disagree over advanced technology, export controls, critical minerals and rare earths supply chains. The United States and China are also seeking to protect their respective strategic and economic interests in areas beyond the specific products covered by the latest tariff reductions. The White House said both sides would continue to work on issues related to rare earths and other critical minerals supply chains.
Beyond the $60 billion in goods covered by the latest tariff reductions, the economic significance of the agreement extends to the operations of numerous multilateral and multinational companies. US and Chinese companies are active across manufacturing, agriculture, retail, technology and global supply chains, meaning changes in tariffs or policies affecting one country can have ripple effects in the other.
For businesses, the extension of the trade truce provides additional time to plan while Washington and Beijing continue to negotiate. For the two governments, the targeted reduction of tariffs on non-sensitive goods provides an opportunity for cooperation in areas where disagreements remain unresolved in other areas of the economy.
The latest agreement thus represents another step toward the management – but not the resolution – of the complex trade relationship between the United States and China. Both sides have reduced tariffs on certain goods, expanded cooperation in specific sectors and kept formal negotiations open while leaving major disagreements over technology, critical minerals and strategic trade for future discussions.
Stay informed with the latest national and international news.
© 2026. All rights reserved.