Tariff easing is not equivalent to a cease-fire: Beijing urges $30 billion in tax cuts, China-U.S. trade enters the "limited exchange" phase

The Chinese Ministry of Commerce said on September 10 that it hopes to reach an agreement with the United States "as soon as possible" on a bunch of mutual tariffs on commodities.The two sides discussed about the size of their respective $30 billion in commodities; Trump previously said that Xi would visit Washington on September 24, while the current tariff ceasefire arrangement will expire on November 10.At the same time, China purchased about 1 million tons of U.S. soybeans this week, and trade and agriculture are at the same time becoming the barrier for negotiations before the summit.

This round of tariff easing is truly remarkable, not $30 billion in itself, but China and the United States have begun to dismantle the comprehensive confrontation into a deal that can be exchanged. Beijing needs to stabilize exports and external markets, while Washington needs agricultural orders, market access and supply chain concessions.

Switching from “tariff war” to “controllable friction”

In recent years, China-U.S. trade policy has increasingly been dominated by national security. Chips, artificial intelligence, rare earth, drones and advanced manufacturing have been difficult to return to the simple free trade logic. Therefore, even a reduction in taxes on some consumer goods and non-sensitive goods does not mean that technology blockade, investment censorship and critical resource play will disappear simultaneously.

In particular, Beijing hopes that the United States will ease high-tech export restrictions, while the United States continues to demand that China expand agricultural products and energy procurement and cut its structural trade surplus. This is a typical “economic stop pain, strategic non-retreat” model: can talk first, can’t talk continues to lock dead.

The true new normal of China and the United States may not be reconciliation or complete disconnection, but the maintenance of a set of trade relations that can be calculated, exchanged and reversed at any time under a high level of distrust.

For China, the urgency of tariff relief is also due to domestic economic pressure. Low real estate, weak residential consumption, and manufacturing and exports continue to take on growth tasks. Even if the US market is no longer as irreplaceable as it was a decade ago, it is still linked to a large number of export companies, employment and foreign exchange income. Beijing therefore needs a summit to release a "controlable relationship" signal to stabilize business and capital expectations.

The U.S. calculator is equally clear. soybean procurement is not only agricultural trade but also domestic politics. China re-increases orders and can directly benefit U.S. farm states; if Beijing makes limited concessions on rare earth, aerospace materials or market access, the Trump administration could package the agreement into “pressure-to-pressure results.”

“There are three limits to the ceiling.”

• First, restrictions on defense, AI, advanced chips and key minerals will not be automatically lifted by tariff cuts on ordinary commodities;
• Second, China's massive manufacturing surplus and subsidy pattern remains at the heart of long-standing European-American controversy;
• Third, Taiwan, the South China Sea and relations with Russia and Iran may at any time drag economic and trade negotiations back to the national security track.

Thus, a $30 billion tariff agreement, even if landed, is more like a “minimum cost outcome” before the summit, rather than a second comprehensive trade agreement.

Focus China believes that trade between the US and China is entering a phase more complex than a trade war: tariffs can drop, hostilities can not go down simultaneously; orders can increase, and technological barriers will still rise. Beijing hopes to breathe in exchange for markets and procurement, and the United States hopes to make concessions in exchange for tariffs and export controls.