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On May 20, it was announced that China and the United States have reached an initial agreement on several key issues following recent economic and trade talks held in Seoul. An official from China’s Ministry of Commerce noted progress on topics including tariffs, trade councils, agricultural exports, restrictions on rare earth exports, and aircraft procurement.
Both nations have aligned on the topic of bilateral trade tariffs. China expresses hope that, moving forward, U.S. tariffs on Chinese goods will not surpass the limits established under the Kuala Lumpur economic and trade framework agreed upon in October of last year, regardless of the circumstances.
The two sides also agreed in principle to establish a reciprocal tariff reduction framework within a trade council structure. This mechanism could potentially cover products valued at a minimum of USD 30 billion from each country. For sensitive goods agreed upon mutually, tariffs might be lowered to the Most Favored Nation rate or even lower.
Back in October 2025, China and the U.S. jointly agreed in Kuala Lumpur to address each other’s trade concerns, resulting in a suspension of certain tariffs and measures until November 10. These included the U.S.’s 24% reciprocal tariffs and China’s corresponding countermeasures, the U.S.’s 50% export control affiliates rule, and related Chinese measures. The arrangement also covered a Section 301 investigation into China’s maritime, logistics, and shipbuilding sectors and China’s retaliatory measures. Both parties are open to extending this agreement.
Additionally, China and the U.S. agreed to establish government-led trade and investment councils. This move aims to transition bilateral trade discussions from crisis management to a more structured, institutionalized framework—enhancing support for economic cooperation. Further negotiations will clarify the councils’ structure, roles, and functions.
Agricultural trade saw notable advances, according to China’s Ministry of Commerce. The U.S. committed to lifting automatic detention of Chinese dairy products, a measure in place since 2008. It also agreed to accept pilot exports of Chinese potted bonsai grown in specialized media and to work toward removing detention measures on three categories of seafood. China agreed to restart registration processes for qualified U.S. beef exporters and lift restrictions related to avian flu in certain U.S. states. Some of these commitments have already been put into effect.
Regarding rare earths, both sides engaged in detailed discussions. China will review export license applications for civilian-use products in line with regulations, and the two countries will collaborate to foster mutually beneficial cooperation while maintaining the stability of global supply chains.
In terms of aircraft trade, Chinese airlines plan to purchase 200 Boeing aircraft on commercial terms to support domestic air traffic growth, while the U.S. committed to ensuring China has an adequate supply of engines and spare parts.
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