Washington and Beijing race to cut duties on $30 billion in goods ahead of the September 24 Trump-Xi summit, but a fragile truce and a November deadline loom over the talks
WASHINGTON, September 10, 2026
China and the United States are pushing to finalize reciprocal tariff reductions on roughly $30 billion of goods before President Donald Trump and Chinese leader Xi Jinping meet in Washington on September 24, Chinese officials signaled Thursday, raising expectations that the two governments will use the summit to announce the most significant rollback of duties since their trade war truce took hold last fall.
Speaking at a weekly briefing in Beijing on Thursday, Chinese Commerce Ministry spokesperson Huang Ling said negotiators are striving to implement the reciprocal tariff reductions on $30 billion of goods “at an early date,” according to the Associated Press. She declined to elaborate on the scope of products under discussion or the size of the cuts being contemplated, but the timing of her remarks, exactly two weeks before the leaders sit down at the White House, was read by trade watchers on both sides of the Pacific as a deliberate signal that a deal is within reach.
The comments mark the clearest public confirmation yet from Beijing that the tariff reduction track first floated by U.S. Treasury Secretary Scott Bessent is advancing. Bessent said in an interview earlier this month, on the eve of the Group of 20 finance ministers’ meeting in Asheville, North Carolina, that “there’s probably $30 billion of non-strategic, non-critical goods on each side that we could remove tariffs on.” His remarks aligned with earlier reporting by Nikkei that negotiators were exploring a package of mutual cuts on low-sensitivity products.
For American importers who have spent nearly two years navigating one of the most volatile tariff environments in modern history, the prospect of even a limited rollback is significant. It would be the first time since the truce was struck that duties actually moved downward on a defined basket of goods, rather than merely being suspended, delayed, or restructured.
A summit with a deadline attached
The September 24 meeting will be the third face-to-face encounter between Trump and Xi in the past year, following their October 2025 meeting in South Korea and a May 2026 summit in Beijing. Both governments have characterized the leader-level meetings as a stabilizing mechanism for a relationship that remains defined by competition in technology, security, and industrial policy.
“Leaders’ diplomacy plays an irreplaceable strategic guiding role in China-U.S. relations,” Chinese Foreign Ministry spokesperson Guo Jiakun said Thursday, in remarks carried by the Associated Press.
The stakes are elevated by the calendar. The truce the two countries reached to halt their escalating tariff war expires on November 10, and negotiators have not yet agreed on the terms of an extension. According to reporting by the South China Morning Post, Beijing wants the truce extended through 2029, effectively locking in stability for the remainder of Trump’s term, while Washington prefers to commit to just one additional year, preserving leverage for future negotiating rounds.
“Trade will be front and center at the summit,” Barclays Bank wrote in a research note this week on the upcoming meeting, while cautioning that the scope for a broad trade deal is limited and that targeted tariff reductions are the more likely outcome.
That assessment reflects a consensus among analysts that the deepest disputes between the two economies, including technology export controls, rare earth supply chains, fentanyl precursors, and Chinese purchases of American goods, remain unresolved and are unlikely to be settled in a single summit. A limited-scope arrangement covering consumer goods and general industrial products is viewed as the achievable near-term outcome.
What the $30 billion package would cover
People familiar with the negotiations have indicated that the contemplated package would exclude semiconductors, artificial intelligence products, critical minerals, and goods tied to national security. Instead, the cuts would prioritize consumer goods and general industrial products with lower political sensitivity, categories where tariffs function mostly as a cost burden on businesses and households rather than as strategic leverage.
The concept remains in a preliminary stage in at least one important respect: the two sides have not publicly confirmed agreement on the specific goods to be covered, the depth of the tariff reductions, or the conditions attached to the exchange. Huang’s comments on Thursday suggest the work is advancing, but the final contours may not be known until the leaders meet.
The tariff reduction track is also embedded in a larger institutional project. At their May summit in Beijing, Trump and Xi agreed to launch a U.S.-China Board of Trade to manage commerce between the two countries, along with a parallel Board of Investment. The reciprocal reduction talks are a central part of the negotiations to stand up the Board of Trade, with the stated goal of identifying and reducing tariffs on equivalent amounts of “non-sensitive” goods on each side.
If the boards become functioning institutions, they would represent a departure from the ad hoc, escalation-driven pattern that has characterized U.S.-China trade relations since 2018, replacing it with a standing bilateral mechanism for managing disputes and negotiating adjustments.
How the two sides got here
The current negotiation is best understood as the latest chapter in a tariff conflict that has run, with pauses and escalations, for the better part of a decade. The first Trump administration imposed Section 301 tariffs on hundreds of billions of dollars of Chinese goods beginning in 2018, citing intellectual property theft and forced technology transfer. Beijing retaliated in kind, and the Phase One agreement of January 2020 froze the conflict without resolving it.
The second term brought a far sharper escalation. Through 2025, Washington layered new duties on Chinese imports under emergency powers, pushing effective rates on some products to extraordinary levels, and China responded with retaliatory tariffs, export controls on critical minerals, and regulatory pressure on American companies operating in China. The mutual escalation rattled global supply chains and financial markets until the two governments stepped back, reaching a truce in the fall of 2025 that suspended further increases and rolled back some of the most punitive measures.
Trump’s October 2025 meeting with Xi in South Korea, which the president rated “12 out of 10,” produced an initial reduction in the U.S. tariff rate on Chinese goods and a one-year trade agreement that has functioned as the operating framework since. The May 2026 Beijing summit extended the architecture, adding the Board of Trade and Board of Investment concepts and bringing American chief executives into the room, a signal that both governments wanted commercial normalization to accompany diplomatic stabilization.
The $30 billion reciprocal reduction package now under negotiation is the first attempt to move beyond stabilization toward actual liberalization, however modest. That is why trade veterans are watching it closely: not for its size, but for whether the machinery of mutual de-escalation can be made to work at all.
The tariff landscape the talks must navigate
The current negotiating environment has been reshaped by an extraordinary sequence of legal and policy shifts in Washington this year.
In February, the U.S. Supreme Court struck down the sweeping tariffs the administration had imposed under the International Emergency Economic Powers Act, ruling in a 6 to 3 decision that the statute did not authorize the president to impose them. That decision invalidated, among other measures, a 20 percent IEEPA-based tariff on Chinese imports and forced the executive branch to rebuild its tariff architecture on other statutory foundations. The ruling left Section 232 national security tariffs and Section 301 trade practice tariffs untouched, and the administration has leaned heavily on both authorities since.
In July, following an investigation into forced labor enforcement, the Office of the U.S. Trade Representative imposed an additional 12.5 percent tariff on Chinese imports under Section 301. A separate Section 301 investigation into industrial overcapacity could add a further 7.5 percent tariff on Chinese goods, a measure aimed at countering what Washington describes as Beijing’s dumping of low-priced goods on global markets.
The cumulative effect of these measures is visible in the trade data. According to U.S. Census Bureau figures, the U.S. trade deficit with China narrowed by one third in the first six months of 2026 compared with the same period of 2025, falling to $73.9 billion. U.S. imports from China totaled approximately $129.3 billion in the first half, against exports of $55.4 billion.
Whether that compression represents durable rebalancing or trade diversion through third countries remains a matter of dispute among economists, but the political fact is that both governments can now point to movement in the headline numbers as they consider whether to ease off.
Bessent’s two-track strategy
The Treasury secretary has paired the conciliatory tariff reduction proposal with pointed criticism of China’s economic model, a combination that captures the administration’s dual-track approach: pursue limited breakthroughs through leader-level diplomacy while applying structural pressure through multilateral forums.
At the G20 gathering, Bessent urged member nations to reexamine their trade terms with China in order to narrow global imbalances. “The world cannot sustain a China with a $1.2 trillion trade surplus,” he said. “China’s economy is quite weak right now. They’re trying to export their way out of trouble, and they need to restructure their economy.”
The United States has pushed for a G20 joint statement calling for reduced trade and current account imbalances, and Bessent planned a bilateral meeting with People’s Bank of China Governor Pan Gongsheng during the gathering. It remains unclear whether Bessent will meet Chinese Vice Premier He Lifeng, Beijing’s top economic negotiator, before the summit.
Bessent has also closed off one avenue that some economists and European officials had promoted: coordinated currency action. With the International Monetary Fund estimating that the yuan may be undervalued by as much as 21 percent, advocates had floated the idea of a modern version of the 1985 Plaza Accord to push the Chinese currency higher. Bessent rejected the notion, calling it “an easy way to avoid dealing with the real trade issues,” which he identified as China’s industrial subsidies and chronically weak domestic demand. The message to markets was unambiguous: tariffs and trade-term negotiations, not exchange rate coordination, will remain Washington’s primary levers.
Stakeholder reactions and the business dimension
The summit choreography itself underscores how central business interests have become to the relationship. The two sides are discussing having Chinese business leaders accompany Xi to Washington, an arrangement seen as a reciprocal gesture after the May meeting in Beijing, where American executives including Nvidia chief executive Jensen Huang and Tesla chief executive Elon Musk attended alongside the U.S. delegation.
Trump told reporters at the White House this week that he looks forward to Xi’s visit and that multiple issues will be discussed, having previously indicated that artificial intelligence would be among the topics.
For U.S. import-dependent industries, the possibility of relief on $30 billion of goods is welcome but partial. Total U.S. imports from China ran at an annualized pace of roughly $260 billion in the first half of 2026, meaning the contemplated package would touch a meaningful but minority share of the flow. Retailers, consumer products companies, and general merchandise importers, the sectors most likely to benefit from cuts on non-strategic consumer goods, have argued for months that layered Section 301 duties are feeding through to shelf prices.
Exporters have their own stake in de-escalation. American agricultural producers, aircraft and machinery manufacturers, and energy exporters have all seen access to the Chinese market fluctuate with the political weather, and China’s retaliatory measures continue to weigh on several categories. A summit-driven easing, even one limited in scope, would signal to Beijing’s buyers that purchasing American goods carries less political risk.
Market observers note that a pre-summit or at-summit announcement of tariff cuts would also help reduce corporate import costs directly and could compress the tariff-related risk premium that has been embedded in supply chain decisions since 2025. But they caution that with technology controls and national security differences still unresolved, any near-term deal is likely to be narrow.
Economic impact analysis
The macroeconomic significance of a $30 billion reciprocal package lies less in its immediate price effects than in its direction of travel. Duties on $30 billion of goods, even if fully eliminated, would represent a modest fraction of the total tariff burden currently applied to bilateral trade. But it would be the first negotiated reduction, as opposed to suspension, since the trade war began, and it would establish a working template: identify equivalent baskets of non-sensitive goods, cut in parallel, and bank the goodwill.
For U.S. consumers, the timing is notable. Federal Reserve researchers reported this week that tariff pass-through to consumer prices has become clearly visible in the data, with tariffs adding as much as 0.4 percentage points to core inflation as of July. Any reduction in duties on consumer goods would work in the opposite direction, though economists caution that retailers do not always pass savings through as quickly as they pass through costs.
For the Federal Reserve, which meets next week to set interest rates, the trajectory of trade policy has become a live input into the inflation outlook. A durable de-escalation between the world’s two largest economies would ease one source of price pressure at a moment when the central bank is weighing how much of current inflation is persistent.
There are also fiscal implications for Washington. Tariff collections have become a significant revenue stream, and the administration has repeatedly cited that revenue in support of domestic policy proposals. Reciprocal cuts trim that stream at the margin, a tradeoff the administration appears willing to accept in exchange for summit deliverables and lower input costs.
Implications for importers and exporters
Trade professionals advising U.S. companies say the practical posture for the next two weeks is preparation without commitment. Importers of consumer goods and general industrial products from China should be mapping which of their tariff lines could plausibly fall within a non-strategic basket, so that sourcing and pricing decisions can be adjusted quickly if a list is published at or before the summit.
Companies should not assume relief for anything adjacent to semiconductors, artificial intelligence, critical minerals, or defense-related supply chains, categories that negotiators have reportedly walled off from the exercise. Firms in those sectors face, if anything, a continued tightening bias, with the overcapacity investigation still capable of adding duties later this year.
The November 10 truce expiration is the risk marker on the other side of the ledger. If the summit produces neither a tariff package nor an extension framework, importers face the possibility of renewed escalation in the fourth quarter, precisely when holiday-season goods are clearing customs. Customs brokers and trade counsel are advising clients to model both scenarios: a modest de-escalation that trims landed costs on consumer goods, and a lapsed truce that reactivates suspended measures.
For exporters, the actionable signal is the composition of Xi’s delegation. If Chinese business leaders travel to Washington in numbers, it will suggest Beijing intends to pair the summit with commercial announcements, potentially including purchases of American agricultural and energy products, the traditional currency of U.S.-China de-escalation.
What could still derail a deal
Trade lawyers and former negotiators point to several ways the package could stall before September 24. The first is sequencing: Beijing has historically insisted that tariff relief precede or accompany purchase commitments, while Washington has preferred to bank concessions first. If the two sides cannot agree on what is announced at the summit versus implemented afterward, the package could shrink to a joint statement of intent.
The second is the definitional fight over “non-strategic.” American officials have walled off semiconductors, artificial intelligence, and critical minerals, but the boundary is blurry in practice. Consumer electronics contain chips; industrial machinery contains rare earth magnets. Each ambiguous product line is a potential sticking point, and customs classification disputes have derailed narrower deals before.
The third risk is political noise. The administration is simultaneously running an overcapacity investigation that could add a 7.5 percent tariff on Chinese goods, and any move to impose it before the summit would likely freeze the reduction talks. Beijing, for its part, retains leverage through rare earth export licensing and its slow-walking of American agricultural purchases, tools it has used before to register displeasure without formal retaliation.
Finally, there is the domestic fiscal politics of tariff revenue. The administration has increasingly cited tariff receipts as a funding source for domestic priorities, including direct payments to households. Every dollar of tariff reduction is a dollar of forgone revenue, and fiscal hawks in Congress have begun to notice the tension. None of these obstacles is considered fatal by analysts, but together they explain why Barclays and others expect the summit to deliver targeted cuts rather than a breakthrough.
The road to September 24
The next two weeks will be dense with signals. The G20 finance track continues, with the United States set to host the G20 leaders’ summit in Miami in December. Bessent’s possible meeting with He Lifeng, if it happens, would be the clearest indication that the tariff package is being finalized rather than merely discussed. And the publication of any Federal Register notice or Chinese Ministry of Commerce announcement detailing product lists would move the exercise from diplomacy to operational reality.
What is already clear is that both governments have decided, at least for now, that a visible easing serves their interests: Beijing gets relief for its export sector at a moment of domestic economic weakness, and Washington gets lower consumer prices and a summit achievement without surrendering its structural complaints. Whether the leaders can convert that alignment into a signed package by September 24, and whether the truce survives past November 10, will determine if this thaw hardens into policy or melts into another round of escalation.