Xi Jinping in US: Beijing, Washington agree to $30 billion reciprocal tariff cut, says report

In a significant development during Chinese President Xi Jinping's visit to the US, China and the US reached an eight-point consensus that includes a $30 billion reciprocal tariff-reduction arrangement and an agreement to launch dialogue on artificial intelligence (AI).

The two countries agreed to reduce tariffs on a range of goods and begin discussions on AI, Xinhua reported. The agreement came at the end of a three-day summit between Xi and US President Donald Trump, which focused heavily on personal diplomacy but produced few major public breakthroughs.

US-China agree to tariff relief on select goods

The tariff arrangement covers specific categories of goods that the two countries can trade on more favourable terms.

US relief covers agricultural goods, seafood, and medical devices, while Chinese relief applies to products such as toys and small appliances.

Previously, US Trade Representative Jamieson Greer told CNBC that Washington and Beijing had reached agreements covering a subset of goods.

"We've actually reached agreement with the Chinese on a number of these things," Greek said on CNBC's Sqawk Box. He referred to goods including US agricultural products and medical devices as well as Chinese consumer goods that are considered non-sensitive.

Busan Agreement extended through January 10, 2027

Previously, US Treasury Secretary Scott Bessent said that Washington and Beijing have also extended their existing trade truce, known as the Busan Agreement, by two months through January 10, 2027.

The extension delays immediate escalation over tariffs linked to industrial overcapacity and gives both sides more time to work through outstanding trade issues.

The Busan Agreement was reached after months of escalating tariffs and retaliatory measures between the two countries. Under the agreement, the US agreed to reduce tariffs on Chinese goods, while China agreed to resume purchases of US soybeans, pause new restrictions on rare-earth exports and take steps against the trade in fentanyl precursor chemicals.

Washington and Beijing also agreed to suspend or delay several other measures that threatened to further disrupt trade.

How the US-China trade dispute escalated

The latest agreement comes after years of tensions that have extended well beyond tariffs.

After Trump returned to the White House in 2025, a new set of tariffs was imposed on Chinese goods. In response, Beijing imposed tariffs and restrictions on critical minerals.

By the time Xi and Trump met, the dispute had expanded to include export controls and restrictions involving rare earths, technology, shipping and other strategic areas, with both Washington and Beijing using trade and economic measures to pressure each other.

The latest eight-point consensus, including the tariff arrangement and planned AI dialogue, therefore represents another attempt by the world's two largest economies to contain those tensions while keeping trade channels open.