Editor's note: Zhou Mi is a senior research fellow at the Institute of American and Oceania Studies of the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce. The article reflects the author's opinions and not necessarily the views of CGTN.

After the eighth round of economic and trade consultations between China and the US, both sides reached a consensus on the details of tariff reductions in bilateral trade. It is worth noting that this consensus was reached under the Board of Trade using the China-US economic and trade consultation mechanism.  

Since the first bilateral economic and trade negotiation in London, both sides have put quite a lot of effort into clarifying their positions, communicating on the possibilities and priorities, and solving the most urgent affairs. The Board of Trade and the Board of Investment also provide more regular and important platforms for stakeholders to engage and contribute to progress in trade and investment.

It is reported that both sides agreed to provide reciprocal tariff reductions on approximately $30 billion worth of their respective imports (based on 2024 bilateral trade volume), subject to compliance with their respective domestic laws and procedures. More than 90% of these products will be exempt from all additional tariffs imposed on each other and will enjoy most-favored-nation tariff treatment. "Reciprocal" is one of the three words that both leaders agreed on in the Washington meeting to give more detail about the vision of strategic stability in China-US relations.

The trade reference year is 2024, when the escalation of so-called reciprocal tariffs did not come. As reported by China's customs, China imported goods worth $163.6 billion from the US, while exporting $524.7 billion worth of goods to the US. If we use the $30 billion for our calculations, the tariff reductions are about 18.3% of China's imports from the US and 5.7% of China's exports to the US in 2024. The reduction of tariffs is likely to be significant for these two sides in terms of trade cost. 

The tariff reduction lists reveal even more details. Based on the categories of items included in the tariff reduction, the numbers of imported products from China and the US obviously varied. The promises covered 1619 items of China's imports from the US, while only 77 items that the US imports from China. The differences reveal that China is quite important for a wide range of US enterprises and families in the supply of intermediate goods and final goods.  

The US economy has long been suffering a lot from the shortage of supply and high inflation resulting from tariffs. Now, the US has reduced the tariffs on the import of toys, home appliances, baby products, kitchen and bathroom supplies, and holiday gifts from China. As the Christmas shopping season approaches, US wholesalers and retailers will have quite a relief in meeting the demand. 

At the same time, as China reduced the tariffs on the import from the US of agricultural products, personal care products, medical devices and coal, these products can meet its requirements and introduce more competitors into the Chinese market for a better and more adequate supply. The diversification of supply chains also injected development strength into other economies.  

Although China is gaining momentum in trade with other partners, the US market is still quite special and important. Chinese enterprises are encouraged to seek more opportunities to work with their US counterparts, make better use of resources and benefit from collaboration in innovation. The Board of Trade is a promising platform because it helps reduce the cost of tariffs and eliminate the non-tariff barriers. Representatives from both sides can also discuss the new areas for trade, including the trade in goods, trade in services and digital trade, within this mechanism.

China-US relations continue to evolve with competition spanning many areas. Chinese companies are not afraid of competition, and are willing to compete fairly with companies around the world. They deserve a level playing field where they can contribute to technological progress, talent development and innovation. Their participation in trade and economic mechanisms can also give policymakers a broader range of views and practical insights, helping both sides better understand market expectations and identify areas where greater alignment is possible. Not every view will be right, but hearing from a wider range of market participants can lead to a more accurate understanding of economic realities and help both sides find practical ways to address differences and move forward.

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