After over a year of tit-for-tat, the US and China could slash sky-high tariffs

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Beijing will work with Washington on reducing levies affecting tens of billions of dollars in goods, the commerce ministry said Wednesday and days after US President Donald Trump visited China.

The world’s two largest economies spent much of 2025 embroiled in an escalating trade war until Trump and Chinese President Xi Jinping reached a one-year truce when they met in South Korea in October.

As a result of their summit last week, a trade council has been set up, under the auspices of which “both sides agreed in principle to discuss a framework arrangement for reciprocal tariff reductions on products of equivalent scale,” the ministry said in a statement.

The intended tariff cuts will affect goods worth $30 billion (€27.3bn) or more on each side, according to an online statement attributed to an unnamed commerce ministry official.

China hopes “the US side will honour its commitment” made during the recent round of negotiations, it added, calling for an extension to the trade truce agreements reached last year.

However, the potential tariff cuts are “not significant enough to change the market’s GDP forecast,” said Zhiwei Zhang of Pinpoint Asset Management.

“Nonetheless this is a positive step in the right direction,” he added. “As long as the two countries are talking to stabilise the bilateral relations, it is good news for global investors.”

The commerce ministry also said China would restore registrations for some US beef exporters, following their lapse last year during the height of tensions with Washington.

Confirming another outcome of the Xi-Trump summit, the ministry said China would purchase 200 aircraft from US aerospace giant Boeing, though it did not specify which model or models.

US media had reported for several months that Beijing was poised to make a major order from Boeing that would include 500 single-aisle 737 MAX jets and around 100 larger 787 Dreamliners and 777s.

On the supply of rare earths — the critical field dominated by China and the target of biting export restrictions implemented last year — the statement was scant on detail.

“Both sides will work together to study and resolve each other’s legitimate and lawful concerns,” it said.