US President Donald Trump (left) and Chinese President Xi Jinping held a closed-door meeting at Zhongnanhai in Beijing on May 15. [Xinhua]
US President Donald Trump (left) and Chinese President Xi Jinping held a closed-door meeting at Zhongnanhai in Beijing on May 15. [Xinhua]

The United States and China are in discussions to lower tariffs on select goods, including American energy and agricultural exports — a development analysts say signals a possible extension of the trade truce ahead of the two leaders' summit Sunday.

Bloomberg reported Tuesday (local time), citing sources, that the two countries have continued talks on tariff reductions for certain goods since their summit in Beijing in May, and that China has called for most-favored-nation tariff rates to be applied to some items.

At the May summit, the two sides agreed to establish a trade committee to discuss partially eliminating tariffs on goods in non-sensitive sectors worth up to $30 billion. Follow-up talks have continued since, and the two countries are now focused on agricultural tariff reductions ahead of next week's White House summit, sources said.

China pledged at the May summit to purchase 25 million metric tons of American soybeans annually through 2028 and has consistently followed through on that commitment. Bloomberg said China has imported more than half of this year's target volume. US Trade Representative Jamieson Greer also said in a Fox News interview on Sept. 3 that there would be "announcements on agriculture and non-tariff barriers related to agriculture" during Xi's US visit.

Bloomberg said agriculture is expected to be a central topic at the summit, noting that a delegation from Cofco, China's state-owned food trading company, will accompany Xi on his US visit. About 10 Chinese companies, including Cofco, are expected to join the delegation accompanying the two leaders at the talks.

Bloomberg also said the discussions on tariff reductions in agriculture and energy suggest the two sides could extend the one-year trade truce agreed at last October's Busan summit.

The trade committee is expected to announce a list of goods on which tariffs will be eliminated at the upcoming summit. Greer has said he expects the committee to announce tariff eliminations on items including toys, games and fireworks.

Meanwhile, US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are set to meet in New York on Sunday for high-level negotiations. Greer is also expected to attend. The meeting is seen as the last round of talks before the summit.

The Financial Times reported that the two countries have still failed to narrow differences on key issues including AI and rare earths, and that they remain at odds over extending the trade truce. The US favors a six-month extension, while China is pushing to maintain the truce for the remainder of Trump's term, the FT said.

The US believes China has not fully honored its rare earth commitments made during trade negotiations. The fact sheet from the May summit included language stating that China had agreed to address US concerns about shortages in the rare earth and critical minerals supply chain — but Washington says Beijing has not faithfully followed through.

The US is also calling on China in the current negotiations to ease its rare earth export restrictions on Japan, arguing that limiting exports to a US ally is disrupting American supply chains as well.


kate01@heraldcorp.com