Xi and Trump Propose New Trade Mechanism to Lower Tariffs on $30 Billion Worth of Goods
The United States and China are expected this week to move toward establishing a managed trade mechanism in non-sensitive goods, where both sides could identify about $30 billion worth of goods each to sell to the other with lower tariffs, without touching national security bottom lines.
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- 📰 Published: May 14, 2026 at 15:21
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(Central News Agency, Washington, 13th, Comprehensive Foreign Report) - The United States and China are expected this week to move toward establishing a managed trade mechanism in non-sensitive goods, where both sides could each identify about $30 billion worth of goods to sell to the other with lower tariffs, without touching national security bottom lines.
Reuters reported that the so-called "Board of Trade" was first proposed by U.S. Trade Representative Jamieson Greer in March as a key "concrete deliverable" agreement during this week's high-stakes summit between U.S. President Trump and Chinese President Xi Jinping.
The outlines of the plan are still unclear, but one key change from past dialogues is evident: Washington is no longer demanding that Beijing change its state-led, export-oriented economic model to one that more closely resembles the consumer-led, market-oriented economy of the United States.
Instead, the effort will focus on trade volume targets in non-strategic industries, while maintaining broad tariffs and export controls on nationally sensitive technologies.
Greer told Fox Business Network last week: "This is not really a situation where we're asking China to change its governance or its economic management model. That's all deeply embedded in their system, but I think we can find ways to optimize U.S.-China trade to achieve a more balanced situation."
He compared the mechanism to a plug "adapter" that helps connect two incompatible economic systems.
U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng met for three hours in Incheon, South Korea, yesterday to finalize economic proposals for discussion by Trump and Xi in Beijing. But the two senior economic officials did not issue any statement on the preliminary meeting.
Four sources familiar with the Trump administration's goals said they expect to use a $30 billion-for-$30 billion framework of reducing trade barriers to launch the new mechanism. However, it is not yet clear whether Trump and Xi will explicitly define any specific goods, or whether that will be left for subsequent meetings.
Wendy Cutler, a former U.S. Trade Representative negotiator and vice president of the Asia Society Policy Institute, said the two sides are "gradually converging on a consensus" for a basket of goods worth about $30 billion to $50 billion to reduce tariffs or other trade barriers.
Cutler said at an Asia Society video forum yesterday, "This basket of non-sensitive goods currently accounts for only a small part of our overall trade with China. So, maybe the Board of Trade will start here," and will gradually expand in the future.
According to U.S. Census Bureau data, bilateral U.S.-China trade in goods shrank by 29%, from $582 billion in 2024 to $415 billion, and the U.S. trade deficit fell by nearly 32% in 2025 to $202 billion, a 20-year low.
The U.S. Trade Representative's Office and the Treasury Department both declined to comment further on the proposed mechanism before the Beijing summit.
China is reluctant to use the name Board of Trade and said in March that the two sides had "agreed to explore the establishment of a working mechanism to expand economic and trade cooperation," but did not disclose further details.
One scenario could involve market-distorting tariffs imposed by Beijing on energy and agricultural products, as the U.S. hopes to increase sales of these products to China.
China maintains a general 10% tariff on all U.S. imports, echoing the current U.S. temporary 10% tariff on Chinese goods. In addition to this and pre-existing "most-favored-nation" tariffs, Beijing has also imposed retaliatory tariffs on U.S. imports, with a 10% tariff on crude oil, 15% on liquefied natural gas, 15% on coal, and up to 55% on beef.
The U.S. maintains a 7.5% tariff on a range of Chinese consumer products, which were imposed during the trade war with China in Trump's first term. Affected products include flat-panel TVs, flash memory devices, smart speakers, Bluetooth headsets, bed sheets, multifunction printers, and many types of footwear. The U.S. 10% global temporary tariff, which is scheduled to expire in July, is in addition to these tariffs.
In addition, when the U.S. imposed tariffs on China during Trump's first term, it approved exemptions for more than 2,200 specific products, but most of them have expired, and the U.S. may now restore some tariff exemptions. (Translator: Chang Hsiao-wen) 1150514
Reuters reported that the so-called "Board of Trade" was first proposed by U.S. Trade Representative Jamieson Greer in March as a key "concrete deliverable" agreement during this week's high-stakes summit between U.S. President Trump and Chinese President Xi Jinping.
The outlines of the plan are still unclear, but one key change from past dialogues is evident: Washington is no longer demanding that Beijing change its state-led, export-oriented economic model to one that more closely resembles the consumer-led, market-oriented economy of the United States.
Instead, the effort will focus on trade volume targets in non-strategic industries, while maintaining broad tariffs and export controls on nationally sensitive technologies.
Greer told Fox Business Network last week: "This is not really a situation where we're asking China to change its governance or its economic management model. That's all deeply embedded in their system, but I think we can find ways to optimize U.S.-China trade to achieve a more balanced situation."
He compared the mechanism to a plug "adapter" that helps connect two incompatible economic systems.
U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng met for three hours in Incheon, South Korea, yesterday to finalize economic proposals for discussion by Trump and Xi in Beijing. But the two senior economic officials did not issue any statement on the preliminary meeting.
Four sources familiar with the Trump administration's goals said they expect to use a $30 billion-for-$30 billion framework of reducing trade barriers to launch the new mechanism. However, it is not yet clear whether Trump and Xi will explicitly define any specific goods, or whether that will be left for subsequent meetings.
Wendy Cutler, a former U.S. Trade Representative negotiator and vice president of the Asia Society Policy Institute, said the two sides are "gradually converging on a consensus" for a basket of goods worth about $30 billion to $50 billion to reduce tariffs or other trade barriers.
Cutler said at an Asia Society video forum yesterday, "This basket of non-sensitive goods currently accounts for only a small part of our overall trade with China. So, maybe the Board of Trade will start here," and will gradually expand in the future.
According to U.S. Census Bureau data, bilateral U.S.-China trade in goods shrank by 29%, from $582 billion in 2024 to $415 billion, and the U.S. trade deficit fell by nearly 32% in 2025 to $202 billion, a 20-year low.
The U.S. Trade Representative's Office and the Treasury Department both declined to comment further on the proposed mechanism before the Beijing summit.
China is reluctant to use the name Board of Trade and said in March that the two sides had "agreed to explore the establishment of a working mechanism to expand economic and trade cooperation," but did not disclose further details.
One scenario could involve market-distorting tariffs imposed by Beijing on energy and agricultural products, as the U.S. hopes to increase sales of these products to China.
China maintains a general 10% tariff on all U.S. imports, echoing the current U.S. temporary 10% tariff on Chinese goods. In addition to this and pre-existing "most-favored-nation" tariffs, Beijing has also imposed retaliatory tariffs on U.S. imports, with a 10% tariff on crude oil, 15% on liquefied natural gas, 15% on coal, and up to 55% on beef.
The U.S. maintains a 7.5% tariff on a range of Chinese consumer products, which were imposed during the trade war with China in Trump's first term. Affected products include flat-panel TVs, flash memory devices, smart speakers, Bluetooth headsets, bed sheets, multifunction printers, and many types of footwear. The U.S. 10% global temporary tariff, which is scheduled to expire in July, is in addition to these tariffs.
In addition, when the U.S. imposed tariffs on China during Trump's first term, it approved exemptions for more than 2,200 specific products, but most of them have expired, and the U.S. may now restore some tariff exemptions. (Translator: Chang Hsiao-wen) 1150514