US-China tariff deal: What's in $30B trade package?
What's the story
The United States and China have announced a $30 billion tariff deal, covering goods such as agricultural products, medical devices, and consumer goods. China's Ministry of Commerce revealed that both countries have agreed to lower tariffs on these products. The plan is for around 90% of items in each category to see reduced tariffs to most-favored-nation (MFN) rates. However, specific product lists and tariff details are yet to be released.
Council formation
A trade council will be formed
The two countries have also agreed to set up a US-China Trade Council under the current economic and trade consultation mechanism.
This council will work toward promoting bilateral trade, and its first task will be to discuss the "30 billion-for-30 billion" reciprocal tariff reduction framework.
Both nations will implement these tariff cuts simultaneously after completing their domestic legal procedures.
Agricultural impact
Agriculture sector major part of deal
The agriculture sector is a major part of the US-China tariff deal.
China plans to cut tariffs on several US agricultural products such as corn, wheat, sorghum, vegetable oils, meat, and dairy products. However, soybeans have been excluded from this list.
This is significant as Chinese state-owned agricultural companies Sinograin and COFCO have already purchased over 12 million metric tons of US soybeans.
Coal inclusion
Deal includes US coal imports
The tariff deal also includes US coal imports.
China will be able to import US coal in 2027 and 2028, with a commitment from the White House that China will import at least 10 million metric tons of US coal each year during this period.
This addition brings an energy aspect to the deal, along with agriculture and manufactured goods.
Investment council
Investment council to be formed
China and the US have also agreed to form a US-China Investment Council.
This council will serve as a regular platform for discussing investment opportunities and barriers, as well as addressing concerns raised by companies under each country's laws and regulations.
An agriculture working group will be established under the Trade Council to discuss agricultural market access and regulatory issues.