US, China to Cut Tariffs on $30B in Non-Critical Goods; Leverage on Tech and Minerals Remains

The U.S. and China have agreed to lower tariffs on approximately $30 billion of non-critical goods through a new 'Board of Trade' as a step toward easing trade friction.

This move is a strategic response to a U.S. Supreme Court ruling that required a new legal basis for tariffs, creating a need for a controlled diplomatic channel.

While cooperating in low-risk areas, both nations are preserving leverage over critical sectors like technology and minerals, with a key truce set to expire in November.

The United States and China have agreed to a carefully managed de-escalation of trade tensions.

This development was largely driven by a U.S. Supreme Court ruling in February that dismantled the previous tariff framework. This legal reset forced Washington to rebuild its tariff structure through new Section 301 investigations—a legally sound but slower process. To manage relations in the interim and secure a diplomatic win, both sides established a narrow "safety valve": a plan to reduce tariffs on about $30 billion of "non-critical" goods.

This strategy is being implemented through two new proposed channels. First, a "Board of Trade" will identify the specific non-critical goods eligible for lower tariffs. Second, a "Board of Investment" aims to create a fast-track process for cross-border investments that clearly pose no national security risk, helping them avoid the lengthy review queues of CFIUS. This is a pragmatic approach to separate low-risk economic activity from sensitive sectors.

However, this cooperation is highly targeted. Washington is maintaining pressure on several fronts. The new Section 301 investigations into issues like forced labor and excess industrial capacity are proceeding, which could lead to new tariffs later. Furthermore, Treasury Secretary Bessent explicitly stated the U.S. is "not in a rush" to extend a truce on tariffs and critical minerals, which expires in November. This keeps a key bargaining chip on the table. Even the parallel talks on AI "guardrails" are designed to secure cooperation on safety without easing export controls on critical technology.

Despite these diplomatic overtures, financial markets remain cautious. From May 13 to 18, major stock indices in the U.S. and China fell, as did prices for industrial commodities like copper. This suggests investors are waiting for concrete action—like a finalized list of goods—before believing that this détente will translate into tangible economic growth. The path forward remains a delicate balance between targeted relief and strategic pressure.

Section 301: A U.S. trade law that allows the president to impose tariffs and other trade restrictions on foreign countries whose practices are deemed unfair.
CFIUS: The Committee on Foreign Investment in the United States, an inter-agency body that reviews the national security implications of foreign investments in U.S. companies.
Critical Minerals: A list of minerals deemed essential to the economic and national security of a country, often used in high-tech manufacturing and defense.

US, China to Cut Tariffs on $30B in Non-Critical Goods; Leverage on Tech and Minerals Remains

The U.S. and China have agreed to lower tariffs on approximately $30 billion of non-critical goods through a new 'Board of Trade' as a step toward easing trade friction.

This move is a strategic response to a U.S. Supreme Court ruling that required a new legal basis for tariffs, creating a need for a controlled diplomatic channel.

While cooperating in low-risk areas, both nations are preserving leverage over critical sectors like technology and minerals, with a key truce set to expire in November.

The United States and China have agreed to a carefully managed de-escalation of trade tensions.

Section 301: A U.S. trade law that allows the president to impose tariffs and other trade restrictions on foreign countries whose practices are deemed unfair.
CFIUS: The Committee on Foreign Investment in the United States, an inter-agency body that reviews the national security implications of foreign investments in U.S. companies.
Critical Minerals: A list of minerals deemed essential to the economic and national security of a country, often used in high-tech manufacturing and defense.