Washington and Beijing’s Tactical Compromise

The global economy received an important positive boost following a three-day summit in Washington between U.S. President Donald Trump and Chinese President Xi Jinping. The Chinese leader’s visit culminated in the signing of a wide-ranging agreement under the U.S.-China Trade Council. The two sides agreed to mutually reduce tariffs on goods worth a total of $60 billion, splitting the amount evenly, with $30 billion for each country. In addition to the tariff relief, Beijing and Washington agreed to extend the existing trade truce by another two months, until January 10, and launched an official bilateral dialogue on artificial intelligence regulation, as well as establishing a joint working group on agriculture.

The new compromise, dubbed the “30-for-30” formula by experts, involves reducing tariffs to most-favored-nation levels for about 90% of the product categories included on the new lists. According to U.S. Trade Representative Jamieson Greer, only nonstrategic and nonsensitive sectors of the economy were included in the changes. Washington focused on supporting American consumers and farmers. China will now lower import duties on a broad range of U.S. agricultural products, including corn, wheat, sorghum, dairy products, poultry, eggs, meat, and vegetable oils. The list also includes U.S. timber, seafood, cosmetics, and medical equipment. According to the White House, the measure will improve access for about 30% of U.S. exports to China. Soybeans, however, were left off the list of products receiving preferential treatment: their shipments will continue to be controlled by Chinese state-owned companies. In return, Beijing confirmed its willingness to purchase U.S. coal on a long-term basis—at least 10 million tons a year.

For its part, the United States is easing tariff pressure on Chinese consumer goods. Toys top the U.S. list, as the segment hardest hit by the previous tariff policy. The tariff cuts will also apply to small household appliances—coffee makers, toasters, and microwave ovens—as well as child car seats, tableware, bedding, fireworks, and holiday decorations. The measure is expected to directly ease the financial burden on American households ahead of the holiday season.

The partial removal of mutual trade barriers has brought noticeable relief to the corporate sector and revived stock markets, but the agreement’s tight deadline of January 10 clearly shows that neither side is ready for lasting peace and that a full-scale trade war could resume at any moment if the next rounds of negotiations reach an impasse

Thus, the agreement is not an attempt to resolve systemic contradictions, but rather a temporary tactical step aimed at stabilizing domestic economies in the short term ahead of the winter season. For businesses, the deal offers only a brief respite, as the broader course toward technological decoupling and economic rivalry between Washington and Beijing remains unchanged.

Author: Doctor of Economics, Professor in the Department of World Economy and World Finance at the Financial University under the Government of the Russian Federation, Gennady Anatolyevich Shcherbakov.