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China and the United States have agreed to a $60 billion deal lowering tariffs on goods including agricultural products, live animals, toys, and medical equipment, though experts note the scope remains limited as sensitive tech items are excluded.
Agricultural products, live animals and toys are on the lists. Both countries say the deal will help boost trade, but experts say it remains a limited deal in the scope of bilateral trade between the US and China.
Whales, surgical robots, emus and soccer balls will all face lower tariffs after China and the United States agreed to a $US60 billion deal following US President Donald Trump's meeting with Chinese President Xi Jinping. Both countries released lists of goods valued at $US30 billion each that are in line for a tariff cut, a move experts say is significant following last week's state visit in Washington.
There are 1,619 US goods entering China that will be eligible for lower tariffs including corn, hair and personal care products, timber and medical equipment like X-ray machines. Live animals including whales for "pure-bred breeding", emus and dugongs are also listed, as are surgical robots. The US listed 77 categories of Chinese goods, including fireworks, tableware, toys like dolls and puzzles, glass and wooden Christmas ornaments, soccer balls and household scales.
Rare earth minerals and technology linked to artificial intelligence were not included on either list and continue to face significant trade restrictions on both sides. Pool via Reuters: Kent NishimuraChina's commerce ministry said in a statement that the agreement would help strengthen trade cooperation, with tariffs on more than 90 per cent of the products to be subject to "most-favoured nation" levels.
"Most-favoured nation" rates are the standard tariffs applied under World Trade Organization rules and are often in the single digits but can vary item to item. US Trade Representative Jamieson Greer said in a separate statement the product lists focused on "non-sensitive goods on each side that could benefit from more favourable tariff treatment".
Mr Greer said the deal could help secure better market access in China for US farmers and businesses, while American consumers would benefit from cheaper household goods. American meat, wheat, dairy, vegetables and vegetable oil are all set to receive lower Chinese tariffs. The lists could be adjusted later, both countries said, but were likely to be reviewed only on an annual basis. Neither side detailed the specific reduction that items would face, nor a timeline to implement them.
ING Bank chief economist for Greater China Lynn Song said it could be the first step in boosting bilateral trade. Monash University economics professor Shi Heling told the ABC, "it shows China and the US have taken a substantive step toward tariff reduction, or toward cooling the trade conflict". He said while the deal was worth only a fraction of the total bilateral trade between the two countries, it had benefits for both China and the US.
The Chinese imports that have lower tariffs were household items and Christmas-related gifts, he said, which could help lower inflation heading into the festival shopping season.
"Politically speaking, there are US midterm elections in November, and American voters are extremely sensitive to prices. If inflation comes down before the midterms, that would really help Trump's administration," Professor Shi said.
"It's also good for China, because China imports agricultural products and medical products from the US, and if tariffs go up, ordinary Chinese people end up paying more. " He said US agricultural exports were much more important than the animals listed, which he believed were there "just to pad out the numbers, to make it look better". He added that there was no guarantee this pact signalled a move toward a more substantial, long-term trade deal.
While the deal is small and does not involve Australia, director of the Australia-China Relations Institute at the University of Technology Sydney, James Laurenceson said the news would be welcomed in Canberra.
"For an open, trade-exposed economy like Australia, the fact that the world's two largest economies are better managing their own trade relationship is broadly a positive development," he told the ABC. "There are limited exceptions to that, such as when our producers could sell goods to China while US producers were effectively locked out by high tariffs. Still, certainly in Canberra, I think the pause and modest tariffs reductions would be welcomed.
" The agreement to cut tariffs was in addition to the deal struck to extend a trade truce through until January 2027.
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