Media: No Longer Trying to Change China’s Economy? The "Trade Committee" Mentioned by U.S. Trade Representative Begins to Take Shape

According to Reuters, it is expected that the United States and China will make progress this week on a trade management mechanism for non-sensitive goods, with both sides possibly identifying products worth around $30 billion each to lower tariffs and facilitate mutual sales without crossing national security red lines.

The so-called "Trade Committee" was first proposed by U.S. Trade Representative Katherine Tai in March this year as a key "deliverable" outcome of the high-level summit between President Trump and Chinese leader Xi Jinping this week.

The outline of this plan remains unclear, but a significant shift from past dialogues is evident: Washington no longer demands that Beijing alter its state-led, export-oriented economic model in favor of a more U.S.-style consumer-driven, market-oriented system.

Instead, the focus of the "Trade Committee" lies in setting trade targets within non-strategic sectors, while continuing to impose broad tariffs and export controls on technologies deemed sensitive for national security.

Last week, Tai told Fox Business Channel, "This isn't about us trying to push China to change its governance or economic management systems—those are deeply embedded in their institutional framework. But I believe we can certainly explore how to optimize U.S.-China trade to achieve greater balance." She likened the mechanism to a "plug adapter" capable of helping connect two otherwise incompatible economic systems.

U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng held a three-hour meeting at Incheon International Airport in South Korea on Wednesday to finalize preparations for economic proposals to be discussed by top leaders in Beijing. However, neither senior economic official issued any statement following the preliminary meeting.

Four sources familiar with the Trump administration's objectives said they expect a $30 billion-for-$30 billion trade barrier reduction framework agreement to launch the new mechanism. It remains unclear, however, whether U.S.-China leaders will specifically define which products are included or reach consensus during subsequent meetings.

Before the Beijing summit, both the Office of the U.S. Trade Representative and the U.S. Treasury declined further comment on the proposed mechanism. China has consistently avoided using the term "Trade Committee," stating in March that the two sides "agreed to explore establishing working mechanisms to expand economic and trade cooperation," without disclosing further details.

The U.S. plans to increase exports of energy and agricultural products to China. China maintains a 10% additional tariff on all U.S. goods, consistent with the current 10% temporary tariffs imposed by the U.S. on Chinese goods.

In addition to these tariffs and previously implemented "most-favored-nation" tariffs, China has also imposed retaliatory tariffs on U.S. goods: 10% on crude oil, 15% on liquefied natural gas, 15% on coal, and up to 55% on beef.

The U.S. continues to impose a 7.5% tariff on a range of Chinese consumer goods—tariffs originally levied during the most intense phase of the trade war under Trump’s first term. These include flat-screen TVs, flash memory devices, smart speakers, Bluetooth headphones, bedding, multifunction printers, and various types of footwear. Furthermore, an additional 10% temporary global tariff, set to expire in July, is layered on top of these existing duties.

The U.S. may also reinstate over 2,200 specific product exemptions from tariffs granted during Trump’s first term, most of which have now expired.

In November 2025, Trump extended temporary tariff exemptions for solar product manufacturing equipment and 164 categories of industrial and medical products—from printed circuit boards to electric motors and blood pressure monitoring devices—for another year. Some of these exemptions could become permanent.

Both sides are also expected to discuss the still-developing concept of an "Investment Committee" to address investment issues. However, Tai said last month at a Washington think tank, the Hudson Institute, "I don’t think our relationship with China has reached a point where we’re ready to discuss large-scale investment projects."

U.S. lawmakers and industry groups from automotive, steel, and technology sectors have warned Trump against agreeing to any deal that would open the door for Chinese investment in the U.S. auto sector, emphasizing that such moves would hollow out the core of American manufacturing.

Notably, the U.S. and China are considering extending the current "truce" agreement on China’s restrictions on rare earth exports during this week’s leadership summit. Chinese customs data shows that Beijing continues to restrict exports of this critical raw material essential for defense and manufacturing.

The resulting global shortage and rising prices of rare earths underscore how the regulatory measures enacted in response to Trump’s “Liberation Day” tariff hikes have become one of the policy’s main lingering legacies—even after most tariffs have been gradually lifted.

China maintains the strictest controls on several specialty rare earths, which are produced on a large scale only in China and widely used in aerospace, defense, semiconductors, electronics, consumer products, and powerful magnets used in electric vehicles.

Customs data shows that since the controls were implemented in April 2025, exports of heavy rare earths—yttrium, dysprosium, and terbium—have declined by approximately 50% compared to the previous 12 months. These volumes typically amount to tens of tons, and because total rare earth exports have nearly fully rebounded over the past year, these declines have been masked.

A senior U.S. official told reporters on Sunday that U.S.-China consultations on rare earths continue, with both sides hoping to maintain stability. However, it remains unclear whether the agreement will be extended during or after Trump’s visit to China. Another U.S. official told Reuters that the rare earth shortage issue persists.

A third U.S. official said the White House recently had to contact Beijing to secure export licenses for a major American company operating in both defense and civilian sectors. The company is losing hundreds of millions of dollars in revenue monthly due to its inability to obtain these licenses.

Source: rfi

Original article: toutiao.com/article/1865157132382280/

Disclaimer: This article represents the personal views of its author