Executive Summary
On September 27, the White House announced further details on the U.S.-China Board of Trade mechanism. The announcement comes on the heels of the September 24-25 meeting between Presidents Donald Trump and Xi Jinping in Washington.
The Board of Trade mechanism seeks to “optimize” bilateral trade between the United States and China by identifying lists of mutually agreed-upon imported goods totaling roughly $30 billion on each side that will be eligible for tariff relief. Documents released as part of the announcement refer to this as the “30-for-30” framework.
The announcement includes two lists of “non-sensitive” products, one containing Chinese products imported into the United States and another containing U.S. products imported into China. The two sides appear to have agreed to provide tariff relief for these products, in general down to the most-favored-nation (“MFN”) level, although implementation may take several months.
The announcement also includes a set of Working Procedures and Terms of Reference that provide further details as to how the Board of Trade mechanism will operate going forward.
Background
During the May 2026 Beijing summit between Presidents Trump and Xi, the United States and China announced that they would establish the U.S.-China Board of Trade, a government-to-government mechanism aimed at managing bilateral trade in “non-sensitive goods” on an ongoing basis. Reports following that meeting indicated that the two sides had discussed using the Board of Trade to implement mutual tariff reductions on around $30 billion in trade on each side, including on consumer goods and agricultural products.
Shortly after this announcement, in June 2026 the Office of the U.S. Trade Representative (“USTR”) issued a Federal Register Notice (“FRN”) seeking comments on the Board’s operating procedures as well as the scope of goods that should be considered “non-sensitive,” and thus eligible for tariff relief under the mechanism. The FRN defined “non-sensitive” products as those that “give rise to few, if any, issues related to economic and national security and supply chain resilience risks.”
In the lead-up to President Xi’s September visit to the United States, U.S. and Chinese negotiators worked together to compile lists of mutually agreed-upon products that would be eligible for tariff relief through the Board of Trade mechanism.
Tariff Reductions for Listed Products
Last week’s announcement included two lists, one containing Chinese products imported into the United States and another containing U.S. products imported into China. The announcement stated that the United States and China would “consider” the two lists “with a view toward providing reduced tariff treatment to those goods in a reciprocal manner, consistent with their respective domestic laws and processes.”
The list of Chinese goods imported into the United States contains primarily consumer products, including appliances, toys, holiday decorations, and car seats. The list of U.S. goods imported into China includes agricultural goods, fish and seafood, logs and wood products, cosmetics, and medical devices.
The announcement did not provide further details on the timing or scope of any tariff relief under the Board of Trade mechanism. Additionally, the lists of products are framed as a set of “recommendations,” and U.S. government officials cautioned in public remarks that the announcement will not result in immediate tariff cuts.
This characterization of the lists as “recommendations” may reflect the need to avoid being seen as having prejudged the outcome of necessary domestic legal processes, particularly on the U.S. side. For example, USTR must complete a notice-and-comment process in order to modify tariffs imposed pursuant to Section 301 of the Trade Act of 1974 (“Section 301”), and that process could take several months to complete. It appears likely that China would not announce its own tariff reductions before the U.S. process is completed.
With respect to the scope of tariff relief, it appears that the Board of Trade mechanism will reduce tariffs to MFN levels for most of the identified products. For example, a statement released by China’s Ministry of Commerce (“MOFCOM”) indicated that tariffs will be reduced to the MFN level for about 90% of the identified products. Meanwhile, the United States may remove tariffs imposed pursuant to the recently completed Section 301 investigation related to forced labor, as well as any future tariffs imposed pursuant to the ongoing Section 301 investigation related to overcapacity. USTR imposed a 12.5% tariff on Chinese goods as a result of the forced labor Section 301 investigation, and is expected to impose a 7.5% tariff on Chinese goods as a result of the overcapacity Section 301 investigation (for a combined rate of 20%, consistent with the 20% tariff the United States previously imposed on Chinese goods under the International Emergency Economic Powers Act (“IEEPA”)).
More uncertain is whether the Board of Trade will provide relief from any tariffs imposed during the first Trump Administration pursuant to the Section 301 investigation into China’s actions concerning technology transfer and intellectual property. Those tariffs generally do not target non-sensitive consumer goods and apply to only a handful of products identified on the Board of Trade list, typically at a rate of 7.5%.
Additionally, we expect that the Board of Trade will not provide relief from any tariffs imposed under Section 232 of the Trade Expansion Act of 1964 or any tariffs imposed under antidumping and countervailing duty (“AD/CVD”) orders.
Clarified Procedures
In addition to product lists, the announcement includes a set of Working Procedures and Terms of Reference, which provide further details on how the Board of Trade mechanism will operate.
Specifically, the Board of Trade will be overseen by senior U.S. and Chinese Principals, namely U.S. Secretary of the Treasury Scott Bessent, U.S. Trade Representative Jamieson Greer, and Vice Premier of the State Council He Lifeng. The Principals’ Deputies will meet at least quarterly to develop proposals that will be presented to the Principals, who will meet as needed to consider any proposals. These proposals will focus initially on implementation of the “30-for-30” framework, including any adjustments needed for the maintenance of that framework, although the documents clarify that the two sides do not envision making adjustments more than once a year.
The Deputies may discuss the potential future expansion of the Board of Trade mechanism to include additional products. As a practical matter, however, we expect that the Board of Trade will be primarily focused on implementing tariff reductions on the agreed-upon $30 billion in trade on each side rather than negotiating new and broader tariff relief.
Fewer Details on Separate Board of Investment
Distinct from the Board of Trade, the United States and China also announced during the May 2026 Beijing summit that they would establish a U.S.-China Board of Investment. Few details were provided regarding the Board of Investment at that time; however, reports indicated that the Board of Investment would not be a formal mechanism but rather a government-to-government forum for discussing investment-related issues.
This week’s announcement provided a bit more information on this entity. A White House Fact Sheet released following the meeting between Presidents Trump and Xi stated that “the mission of the Board of Investment is to discuss potential investment opportunities and investment-related impediments and to provide a structured channel for the two sides to address commercially meaningful investment-related issues.” However, no further details were provided, and key questions remain as to how the Board of Investment will operate in practice.
Covington’s International Trade Practice
Covington’s trade lawyers have been advising a wide range of clients with regard to the U.S.-China Board of Trade, including with respect to submitting comments to USTR. Covington is well-placed to assist with related customs and supply chain questions, as well as with assessing exposure to U.S. and Chinese trade actions and evaluating options for navigating such measures. If you have any questions concerning this alert, please contact the following members of our Trade Policy practice.
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