US, China Discuss Tariff Cuts Ahead of Trump-Xi Summit, Raising Hopes for Trade Truce Extension

The US and China are discussing tariff cuts on some goods, including US energy and agricultural products, ahead of a leaders’ summit next week, fueling expectations that the two countries may extend their trade truce.

Bloomberg reported on September 15 that Washington and Beijing are negotiating ways to lower reciprocal tariffs on roughly $30 billion of goods, based on an existing framework. The two sides are also considering applying most-favored-nation tariff rates to some Chinese products.

They are also discussing lowering tariffs on Chinese raw materials and components used by US manufacturers. A related agreement could be reached at a summit between US President Donald Trump and Chinese President Xi Jinping scheduled for September 24 in Washington.

Senior-level talks are also planned ahead of the summit. Treasury Secretary Scott Bessent said he would meet Chinese Vice Premier He Lifeng this weekend to coordinate the summit agenda. He did not disclose the meeting’s time or location.

Agriculture is set to be a main agenda item in the negotiations. Officials from COFCO, China’s state-owned food company, may accompany Xi on his US visit, and a delegation of chief executive officers from more than 10 companies is also under consideration.

Still, competition in advanced technologies, including artificial intelligence, and China’s ties with Iran and Russia remain variables in the negotiations. Bessent told the House Financial Services Committee that it was important for the US to maintain its technological edge in the AI race with China.

Bessent also said he plans to discuss sanctions related to the Iran war in his meeting with He. As the US steps up economic pressure on Iran, it is treating financial ties between China and Iran as a key issue.

If the two countries agree to extend the trade truce and cut tariffs, they could ease one source of strain on the global economy as uncertainty rises over the wars in the Middle East and Ukraine, high oil prices and concerns about renewed inflation.