Description: China and the US, days after the leaders summit between Trump and Xi, lifted reciprocal tariffs on non – sensitive products that would amount to $60 billion. The lists included 1,619 items that would be exported from the US to China and covered 77 categories of products that China would export to the US. The industries mostly affected by the lifting of trade restrictions would be agriculture, household goods, toys, cosmetics, timber and various equipment. The Chinese Ministry of Commerce reported that the move effectively enhances bilateral cooperation and eases trade tensions. Within the latest lifting of restrictions, China also agreed to import US soybeans according to a previously agreed arrangement from the trade negotiations during 2025. On artificial intelligence, both countries agreed to open – channel crisis communication and agreed on expanding cooperation in the financial services department. Companies with US capital would be able to open branches in China in addition to the expansion of commercial flights between the two countries.
Impact: The lifting of tariffs on non – sensitive products highly likely signals further trade negotiations rapprochement between China and the US and is unlikely to change or dictate the long – term behavior from both countries. Although a positive signal regarding the ongoing trade dispute, the move likely signals no significant bilateral concessions, as it makes no substantial change in terms of bilateral trade surpluses affecting insignificant categories of products. Strategic goods such as chips, rare earth minerals, pharmaceuticals, were notably excluded from the tariff exemptions which highly likely indicates that trade tensions would persist in the short to mid – term period. The current exemptions likely provide a soft landing for both leaders as they are set to meet at least twice till the end of the year where they would likely continue to work towards reducing trade tensions. Trump would almost certainly present the development as a major achievement before its political base and opposition in an attempt to boost the declining prospects of the Republican party in the mid – terms. China is likely in favor of continuing the trade negotiations at a lower scale of economic hostility presenting itself as an economic peacemaker while vying for global dominance through its export – driven economic model.