U.S. China Extend Trade Truce Two Months, Will Consider Tariff Cuts

A summit last week between U.S. and Chinese leaders yielded limited progress on trade-related issues, including the following.

Tariffs

According to a White House fact sheet, the two sides “operationalized” the U.S.-China Board of Trade by establishing its mission, composition, leadership, meeting schedule, and roles and responsibilities. The initial task of the BOT is to “develop a proposal for consideration regarding trade in select goods with a view toward providing reduced tariff treatment to those goods in a reciprocal manner.” The White House said the two sides have already “reached consensus on recommendations for more favorable tariff treatment for $30 billion of non-sensitive goods in each direction.”

With respect to U.S. imports from China, covered goods include plastic ware, blankets, bed and table linens, sleeping bags, curtains and wall hangings, umbrellas, small appliances, toys, holiday decorations, children’s car seats, toys, game and sport equipment, fishing equipment, artists’ brushes, and vacuum flasks and vessels.

With respect to Chinese imports from the U.S., covered goods include agricultural products, fish and seafood, logs and wood products, cosmetics, and medical devices.

Officials will monitor and assess bilateral trade in the covered products and could propose adjustments, including the expansion of this arrangement to include additional products, though adjustments are not expected to be made more frequently than annually.

However, what form the “more favorable tariff treatment” will take and when it may be implemented are unclear. The terms of reference for the arrangement said there will be “future tariff reductions,” which China’s Ministry of Commerce said could be to most-favored-nation rates, but U.S. Trade Representative Jamieson Greer was cited in several press reports as indicating that covered goods will not see reductions in existing tariffs but instead may be exempt from any potential future tariff increases.

Trade Truce

Senior officials said (but no official documentation has yet been issued to confirm) that the U.S. and China agreed to extend through Jan. 10, 2027, a November 2025 agreement aimed at easing trade tensions by suspending tariff increases and export restrictions. It was not immediately clear which elements of that agreement are being extended or if they all are.

One issue of particular interest to the U.S. is China’s export controls on rare earths and related measures, which China suspended as part of the November 2025 agreement. The White House said only that these restrictions remain under discussion, “with the goal of ensuring shipment levels return to appropriate levels.”

Other

The U.S. said (but, according to some press sources, China has not yet confirmed) that (1) China has agreed to import at least 10 million metric tons of coal from the U.S. in 2027 and again in 2028, and (2) a new Board of Investment has been established to discuss potential investment opportunities and investment-related impediments and to provide a structured channel for addressing commercially meaningful investment-related issues.