U.S. and China Agree to Tariff Cuts, Launch New Trade Councils

The United States and China have agreed in principle to reduce tariffs on a limited range of goods and to establish two new bilateral councils to manage trade and investment disputes, the Chinese Commerce Ministry announced on Friday, marking the most concrete progress in economic negotiations between the world's two largest economies in years.

The Commerce Ministry spokesperson confirmed that the two countries had also reached initial agreement on resolving longstanding non-tariff barriers affecting agricultural exports, easing market access restrictions, and cooperating on civil aviation procurement and parts supply.

"Both sides have agreed to implement earlier consultation outcomes and have formed positive consensus on tariff arrangements," the spokesperson said at a press briefing in Beijing.

Trade And Investment Councils Established

The most structurally significant development is the creation of a bilateral Trade Council and an Investment Council. The Trade Council will serve as the primary forum for discussing product-specific tariff reductions, with both governments agreeing in principle to cut duties on equivalent volumes of goods that are of mutual concern. Final product lists, reduction magnitudes, and implementation schedules are still being negotiated.

Analysts said the council architecture signals a shift toward institutionalized trade management rather than ad-hoc diplomatic interventions — a model that could provide a more durable framework for managing commercial frictions.

Agricultural Access And Non-Tariff Barriers

Agricultural trade featured prominently in Friday's announcement and was separately highlighted by U.S. trade representatives upon their return from talks. Both governments committed to resolving or substantially advancing a series of non-tariff access disputes that have weighed on bilateral farm trade for years.

The U.S. side agreed to actively work toward resolving China's longstanding concerns over automatic detention measures applied to Chinese dairy and aquatic products, restrictions on decorative bonsai imports, and the recognition of Shandong province as an avian-influenza-free zone.

China, in turn, committed to advancing resolution of American concerns regarding the registration of U.S. beef processing facilities and access for poultry products from certain U.S. states.

Civil Aviation Deal Secured

One of the few areas where specific commercial arrangements were confirmed involves civil aviation. The two sides agreed on terms covering China's procurement of U.S.-manufactured aircraft, alongside corresponding U.S. commitments to ensure continued supply of aircraft engines and components to Chinese carriers. Both governments agreed to advance further cooperation in the sector.

Priority Sectors For Tariff Relief

Based on the preliminary framework, expert analysis indicates that tariff reductions will concentrate on non-sensitive product categories. Agricultural goods and civil aviation are the two most explicitly confirmed areas. Beyond these, the focus is expected to cover select consumer electronics accessories, household goods, apparel and footwear, non-sensitive components in industrial and medical equipment, and energy products.

Most of these goods are currently subject to Section 301 tariffs. Because they span a wide range of product categories and represent substantial bilateral trade volume, analysts assess a high probability of tariff reduction under the agreed framework. The U.S. may also extend or expand prior product-specific exemptions, particularly for industrial and medical goods.

Current U.S. Tariff Structure On Chinese Goods

The existing tariff regime on Chinese imports is layered across three distinct legal authorities. Section 301 tariffs, which target China specifically, carry rates of 7.5 to 100 percent and cover roughly half of all Chinese exports to the United States. The bulk of affected products face rates between 7.5 and 25 percent, while electric vehicles, batteries, semiconductors, and medical supplies — targeted under the Biden administration's 2024 expansion — face rates as high as 100 percent.

Section 122 tariffs, introduced at a flat rate of 10 percent after a court invalidated earlier reciprocal and fentanyl-related measures, apply globally including to China. They took effect on February 24, 2026 for a 150-day period through July 24, 2026, and exclude electronics, critical minerals, certain agricultural goods, pharmaceuticals, and products already covered by Section 232.

Section 232 tariffs, originally justified on national security grounds, apply globally at rates of 25 to 50 percent and cover steel, aluminum, copper and their derivatives, as well as automobiles and auto parts. Metal-intensive industrial and grid equipment qualifies for a reduced 15 percent rate through December 31, 2027, after which the rate rises to 25 percent. Both Section 122 and Section 232 measures are global in scope and are not understood to be part of the bilateral tariff negotiation at this stage.

Background

Section 301 tariffs were first deployed by the Trump administration in 2018, when duties of 7.5 to 25 percent were imposed on more than $200 billion worth of Chinese goods. The Biden administration subsequently used the same authority in 2024 to impose additional levies on Chinese electric vehicles, batteries, semiconductors, and medical supplies. Together, these measures now cover approximately half of all Chinese exports to the United States.

Section 122 tariffs were introduced after a court earlier this year invalidated prior reciprocal and fentanyl-related tariff authorities. Section 232 tariffs, which have been in place since the first Trump term, were broadened to cover automobiles and auto parts and remain in effect for all trading partners.