U.S.-China Trade Council Agrees on Preferential Treatment for $30 Billion in Goods Each Way
Key Facts
U.S. Treasury Secretary Scott Bessent said on November 11 that the U.S.-China Trade Council had reached an understanding to identify more favorable tariff treatment for $30 billion in non-sensitive goods in each direction. The statement establishes a framework for further discussion of tariff treatment, while Bessent did not announce in his statement that it would take effect. The Treasury Department quoted him as saying: "Within the framework of the Trade Council, we reached an understanding to identify more favorable tariff treatment for $30 billion in non-sensitive goods in each direction." The council also announced the launch of a working group to address trade barriers in the agricultural sector. This agricultural track adds a specialized negotiating channel to the understanding on non-sensitive goods.
Bessent's wording indicates that the understanding concerns identifying the goods and the treatment they will receive, while his remarks included no details on product lists or an implementation date. China's Ministry of Commerce had announced in September that an earlier arrangement included mutual tariff cuts on imports worth about $30 billion from each side. The ministry said more than 90% of the products covered by that arrangement would be exempt from additional reciprocal tariffs and treated under most-favored-nation tariffs. The Associated Press, citing an economist at Capital Economics, estimated that the average overall U.S. tariff rate on China could fall from about 22% to about 20.5% after that arrangement, compared with about 11% before President Donald Trump returned to the White House. These figures relate to the arrangement announced in September and do not by themselves define the scope of the understanding Bessent discussed in November.
On implementation, China's Ministry of Commerce said tariff cuts under the earlier arrangement would begin simultaneously after both countries completed their domestic legal procedures, and that details would be announced later. The ministry also said the agricultural working group would discuss market access and regulatory issues. The two sides agreed, according to the ministry, to hold the group's first meeting before the end of 2026. Bessent's statement set no comparable date and provided no timeline for implementing the understanding on better treatment. Completion of domestic procedures and publication of details are announced milestones for tracking the tariff-cut arrangements, alongside the start of the agricultural group's work.
The move comes as discussions continue on the broader trade arrangement between the two countries. China's Ministry of Commerce said the arrangement, which had been scheduled to end on November 10, 2026, was extended to January 10, 2027, with efforts to reach an agreed solution continuing. According to the ministry, the extension concerns a suspension of the implementation of some reciprocal tariff and non-tariff measures. In a separate development from the understanding Bessent announced, China had previously agreed to import at least 25 million metric tons of U.S. soybeans and 10 million metric tons of U.S. coal over the following two years, according to the Treasury Department. These pledges provide context for the focus on agricultural trade, but remain separate commitments from the understanding on tariff treatment.
China's October trade data, released on November 10, showed exports rising 35.2% year on year, after a 36.3% increase in September, and exceeding the 33.5% average forecast in a Reuters poll. In the same month, imports grew 41.6% year on year, surpassing forecasts of 32% and compared with a 31% increase in September. The acceleration in imports coincided with the trade surplus narrowing to $105.3 billion in October from $133.5 billion in September. However, the surplus reached $1.04 trillion over the January-to-October period, according to the Associated Press. These figures provide background on China's trade flows during the period when the understanding emerged and do not detail a direct link to its effects.
Bessent said Washington's goal in its relationship with Beijing is to "reduce risk, not decouple." The Treasury secretary is due to join Trump in Shenzhen next week, where he will meet Chinese President Xi Jinping, according to the department's statement. The statement added that the Shenzhen meeting will precede a fourth meeting between the two presidents in Miami. This diplomatic track places the trade understanding in the context of high-level contacts between the two countries, without the Treasury statement specifying whether the meetings will lead to an announcement of new tariff details. Completion dates for procedures and publication of details on the agricultural and tariff arrangements remain the follow-up points announced by China's Ministry of Commerce.