The United States and China agreed on Saturday to steps aimed at easing trade tensions after a three-day summit in Washington. The measures included Beijing's pledge to import at least 10 million metric tons of US coal in 2027 and the same amount in 2028, while working toward preferential tariffs on $30 billion worth of non-sensitive goods.
The White House said the Chinese pledges included buying coal and opening markets to US exports, while China's Foreign Ministry said the two countries had agreed to establish a trade council and arrange tariff reductions. Chinese President Xi Jinping returned to Beijing on Saturday after the summit with US President Donald Trump.
Trade Understandings and New Markets
The goods under consideration for preferential tariffs include US agricultural products, seafood, timber, cosmetics and medical devices, along with Chinese consumer goods such as small household appliances, toys, holiday decorations and child car seats.
The two sides launched a working group on access to agricultural markets and an investment council. Trump also asked Xi to increase refined petroleum production to help stabilize global supplies and ease pressure on fuel prices.
These understandings support US exports of energy and agricultural products and create a path toward lower costs for some consumer imports. China, meanwhile, avoids a further escalation of tariffs on its export sector and gains a period of trade stability.
Domestic Pressures on Both Economies
Beijing entered the negotiations amid the fallout from a property crisis that had weakened household wealth and domestic spending. Apartment prices in China have fallen by about twice as much as US home prices did during the 2008 crisis, affecting household savings and the revenues of local governments reliant on land sales.
Weak demand has weighed on activity at restaurants, shopping centers and auto dealerships, increasing China's reliance on exports to sustain growth. In the United States, pressure is centered on higher energy costs and continuing concerns over inflation and the cost of living ahead of the midterm congressional elections in November.
Trade figures point to the limited impact of US tariffs so far. China faces an effective average tariff of about 23%, the highest among the United States' major trading partners, compared with about 7% for the rest of the world, according to Barclays estimates.
Despite the tariffs, China's trade surplus is on track to match or exceed the record of about $1.2 trillion recorded last year, after some trade was redirected through Southeast Asia and Latin America, while Chinese goods continued to reach US consumers through third countries.
Cargo-handling activity at Chinese ports rose 9% in the week ended September 20 from a year earlier, reaching an all-time high, according to data from China's Ministry of Transport. The large surplus reflects Chinese companies' reliance on overseas markets to sell output that domestic demand cannot fully absorb.
Rare Earths and Chips as Leverage
China retains direct influence over supply chains for rare earths and magnets used in automobiles, electronics and defense industries. Economist Adam Farrar says the United States and most countries around the world will remain dependent on Chinese magnets through 2030 and beyond, limiting Washington's options in any new economic escalation.
The United States, meanwhile, is maintaining restrictions on China's access to the most advanced artificial-intelligence chips. This reflects an imbalanced mutual dependence: Beijing has influence over raw materials and strategic minerals, while Washington has leverage in advanced technology and access to a large consumer market.
A Short Truce Before a New Round
US Treasury Secretary Scott Bessent said the trade easing would be extended only until January 10, or about two months, instead of the six-month period previously under discussion. A new meeting between the two leaders is scheduled for November.
The period allows the two sides to test implementation of the pledges and continue negotiating the most complex issues without resolving the fundamental imbalances between the two economies. The United States still depends on China for rare earths, while China's economy remains reliant on external demand, and US restrictions on advanced chips remain in place.
