China and the U.S. hope to reach an agreement on lowering import taxes soon, a Chinese government spokesperson said Thursday, fueling expectations that an announcement could come when the leaders of the two countries meet in two weeks.
Negotiators are striving to implement reciprocal tariff reductions on $30 billion worth of goods “at an early date,” Commerce Ministry spokesperson Huang Ling said at a weekly briefing.
The $30 billion will be from each side, China’s official Xinhua News Agency said.
U.S. President Donald Trump and Chinese leader Xi Jinping are expected to meet in Washington on Sept. 24 for what will be their third face-to-face talks in the past year. Both governments characterize the meetings as a way to stabilize relations in an era of competing interests between the world’s two largest economies.
“Leaders’ diplomacy plays an irreplaceable strategic guiding role in China-U. S. relations,” Chinese Foreign Ministry spokesperson Guo Jiakun said Thursday.
Trump and Xi agreed at their previous meeting in May in Beijing to launch a U.S.-China Board of Trade that would manage trade between the two countries, along with a parallel Board of Investment. The agreements came after a truce was reached in a blistering tariff war in which Trump hiked tariffs on Chinese imports to extremely high levels and China responded in kind.
The talks on reciprocal tariff reductions are a central part of the negotiations on creating the Board of Trade. The goal is to identify and reduce tariffs on equivalent amounts of “nonsensitive” goods on each side, the U.S. said.
“Trade will be front and center at the summit,” Barclays Bank said in a research note this week on the upcoming Trump-Xi meeting, noting that the truce the two countries reached on tariffs expires on Nov. 10. But it cautioned that the scope for a broad trade deal is limited, and that targeted tariff reductions are more likely.
But as the U.S. and China have already reduced mutual trade reliance, the “overall trade significance will be more limited than before, given the smaller bilateral volume,” said Gary Ng, a senior economist at French bank Natixis.
Chinese exports to the U.S., for example, fell sharply last year, after the U.S. rolled out elevated tariffs.
An agreement on reciprocal tariff reductions could likely benefit the U.S. more, as $30 billion is roughly 28% of its exports to China, while it is only around 10% the other way around, Ng said.