WASHINGTON (Reuters) – The US and China are expected to inch toward a managed trade mechanism for non-sensitive goods this week, with each side possibly identifying some $30 billion worth of goods on which they could reduce tariffs and sell to each other without crossing national security red lines.
The so-called “Board of Trade” was first broached by US Trade Representative Jamieson Greer in March as a key “deliverable” agreement for this week’s high-stakes summit between US President Donald Trump and Chinese President Xi Jinping.
The contours of the plan remain sketchy, but a key shift from past dialogues is clear: Washington is no longer demanding that Beijing change its state-directed, export-driven economic model to become more like the US consumer-driven, market-oriented model.
Instead, the effort is focused on numerical trading targets in non-strategic sectors while keeping in place broad tariffs and export controls on national security-sensitive technologies.
“It’s not really a situation where we go and get China to change the way they govern, the way they manage their economy,” Greer told Fox Business Network last week.
“That’s all baked into their system, but I think there is a world where we find out where can we optimize trade between China and the United States to achieve more balance.”
He likened the mechanism to a plug “adapter” that can help connect two incompatible economic systems.
U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng met on Wednesday for three hours in Incheon, South Korea to lay final groundwork on economic proposals for Trump and Xi to discuss in Beijing.
But the two top economic officials did not issue any statements about their preliminary meeting.
Four people familiar with the Trump administration’s objectives said they expected a $30 billion-for-$30 billion trade-barrier reduction framework arrangement to launch the new mechanism.
But it’s unclear whether any specific goods will be defined by Trump and Xi or if that will be achieved in subsequent meetings.
Wendy Cutler, a former USTR negotiator who heads the Asia Society Policy Centre in Washington, said both sides “are coalescing around” a $30 to $50 billion basket of goods for reduced tariffs or other barriers.
“The non-sensitive basket is just such a small part now of our overall trade with China.
So maybe this Board of Trade, maybe it starts with that” and expands in the future, Cutler told a virtual Asia Society forum on Tuesday.
