US and China agree to $30 billion tariff cut and AI dialogue

China and the United States agreed to a $30 billion reciprocal tariff-reduction arrangement and to launch a dialogue on artificial intelligence, under an eight-point consensus reached during Chinese President Xi Jinping's meeting with US President Donald Trump, China's Ministry of Foreign Affairs said. The agreement followed a three-day summit in Washington, and Xi landed back in Beijing on Saturday, Chinese state media.jpost.com+1

The consensus matters because it puts working-level machinery behind a relationship that had been defined by escalation. The two sides endorsed the establishment of a trade council, the tariff-reduction arrangement, and an extension of outcomes from earlier talks in Kuala Lumpur, the ministry said. The White House said the Board of Trade went into operation this week, covering selected bilateral trade issues.

What the eight-point consensus covers

On tariffs, the two sides will continue to work together on the pledge to reduce reciprocal tariffs on roughly $30 billion worth of goods, according to the statement from the Chinese side. Most of the reduction in tariffs is aimed at non-sensitive goods, such as agricultural products or holiday decorations. The arrangement covers $30 billion of non-sensitive goods in each direction.en.royanews.tv

How the tariff cut works

US Treasury Secretary Scott Bessent said the two countries extended their trade truce by two months past its original expiration date of November 10, allowing more time to negotiate a broader long-term agreement. The White House said China agreed to import at least 10 million metric tons of coal from the US in 2027 and 2028. The two sides also continued work on American concerns about rare earths supply.

China put export controls on rare earths last year in response to US tariffs, cutting the supply sent to the US and other countries. The White House said both sides continued to work on those concerns, with the goal of ensuring shipment levels return to appropriate levels. The United States also welcomed China's move to add export controls for an additional two precursor chemicals for fentanyl.

On artificial intelligence, the two sides agreed to establish a dialogue to discuss the technology's risks and benefits, with the next round of discussion set for November, and to set up a communication channel for AI-related incidents, China's Ministry of Foreign Affairs said. The channel is intended to address potential AI-related incidents and technical miscalculations between the two governments.

The AI channel and its timing

The two sides also agreed to accelerate work on military crisis communications and to sign a memorandum of understanding on strengthening crisis communications and preventing crises between the two militaries, China's Foreign Ministry said in its readout. The one-page statement from the Chinese side was light on details. Both sides said the summit produced no major breakthroughs on their fundamental differences.

Wang Zichen, deputy secretary-general of the Beijing-based think tank Center for China and Globalization, said personal diplomacy between the two leaders matters but that the emphasis on working-level engagement, military-to-military dialogue and crisis-management mechanisms suggests an effort to make that stability more durable and institutionalized. Analysts called the incremental steps noteworthy despite the absence of major breakthroughs.

Analysts weigh the summit

On foreign policy, the leaders agreed that Iran should fulfil its commitment not to develop nuclear weapons, and that no country or entity should impose transit tolls on international waterways, the ministry said. Both sides also recalled that China and the United States fought as allies in the Second World War, and pledged support for each other's hosting of the Asia-Pacific Economic Cooperation leaders' meeting and the Group of Twenty summit.

Both leaders signalled their intention to attend the gatherings hosted by the other. The two sides agreed to meet at the Asia-Pacific Economic Cooperation summit in Shenzhen, China, in November, and then later at the G20 at the Trump National Doral Miami golf club in Florida. The AI dialogue's first round is also scheduled for November.