From September 20 to 23 in New York City and Washington, D.C., China and the United States held their eighth round of economic and trade consultations since the negotiations began in May 2025. The meetings reached positive consensus that contributes to the outcomes of the state visit of President Xi Jinping to the U.S. from September 23 to 25.

The eight deliverables and understandings reached by Xi and U.S. President Donald Trump during the visit encompass bilateral relations, the outcomes of the economic and trade consultations and arrangements for cooperation in areas including AI. Collectively, they enhance the stability of the external environment for China-U.S. economic and trade cooperation and boost market confidence.

Greater certainty 

During the latest round of consultations, the two sides agreed to make reciprocal reductions to tariffs on approximately $30 billion worth of goods imported from each other, with tariffs on roughly 90 percent of the covered products to be lowered to most-favored-nation (MFN) rates, effectively meaning country-specific tariffs will be eliminated. The return to MFN rates will create favorable conditions for addressing the key commodity needs of each side, supporting domestic supply chains and meeting the most critical market demands in the economy. It will also ease difficulties faced by some small and medium-sized enterprises and agricultural workers that have been affected by trade tensions.

China will reduce tariffs on 1,619 categories of goods imported from the U.S., spanning agricultural products, personal care products, medical equipment and coal. For its part, the U.S. will cut tariffs on 77 categories of goods imported from China, including toys, home appliances, baby products, kitchen and bathroom goods, and holiday gifts. Despite the disparity in the number of categories on each side, the trade values involved are broadly comparable, reflecting the basic principle of reciprocity emphasized by both sides.

Chinese exporters of the listed products may see notable gains. In addition to companies exporting finished products, businesses exporting raw materials and intermediate goods will also gain more stable access to the U.S. market. U.S. consumers have strong purchasing power and remain willing to buy high-quality, affordable Chinese products. These tariff-reduced goods will effectively meet this demand, opening up greater room for development in China's manufacturing and e-commerce sectors.

The two sides agreed to establish the Board of Trade and the Board of Investment under the China-U.S. economic and trade consultation mechanism. The Board of Investment aims to facilitate long-term China-U.S. collaboration, mutually beneficial cooperation between enterprises, upstream-downstream coordination and the synergy of industrial and supply chains.

The two sides further agreed to establish an agricultural working group under the Board of Trade. Agriculture is a high priority in China-U.S. economic and trade consultations and is an area in which both countries have made substantial efforts to advance trade links. There is considerable room for follow-up discussions on issues such as two-way market access and regulatory matters.

Cooperation through these three mechanisms will provide key support for bilateral economic and trade cooperation.

The two sides reached a consensus in principle on financial services. China will examine and approve applications from the financial service institutions of all countries, including those with U.S. capital, to conduct business and establish branches in China. Meanwhile, China hopes the U.S. will also provide a fair, transparent and stable policy environment for Chinese financial institutions.

Financial services are a key component of the services sector. Better provision of these services will also offer consumers and businesses in both countries more efficient support.

The consultations decided to extend the joint arrangements reached in October 2025 during the fifth round of China-U.S. economic and trade consultations in Kuala Lumpur, Malaysia, through January 10, 2027, further stabilizing market expectations and ensuring stable bilateral trade and adequate supplies during the year-end peak consumption season. Those arrangements provided for suspending certain tariff and non-tariff measures until November 10, 2026.

The negotiators also established a dialogue on AI and held their first discussion on AI-related risks and benefits. Direct China-U.S. exchanges on these issues can help reduce information gaps, enhance mutual trust, and provide strong support and create a more favorable environment for the sound development of the transformative technology, which is in line with global development interests. 

Long-term resilience 

Businesses rarely make investment decisions based solely on short-term opportunity. Instead, they place importance on the stability of the business environment and investment returns in the host country. Chinese and U.S. companies have established long-term and stable partnerships through mutual investment.

Many U.S. companies have been investing in China for nearly 40 years, since the establishment of diplomatic relations between the two countries in 1979. Initially, they were drawn by China's low labor costs to reduce expenses and boost competitiveness, which, in turn, provided strong support for China's rapid economic and social development. Their strategies, however, are shifting. They now prioritize the development opportunities within the Chinese market, drawing on the systemic support offered by the country's economic and industrial structure. Amid global uncertainties, China continues to become more internationally open, creating more stable expectations for investors and attracting foreign-invested companies to share results of its development.

In September, the Ministry of Commerce (MOFCOM) released a report on China's foreign direct investment. It showed that U.S. enterprises made actual investment of $2.07 billion in China in 2025, accounting for 2 percent of annual foreign capital inflows. By the end of the year, cumulative actual U.S. investment in China had reached $103.03 billion, with the number of U.S.-invested enterprises exceeding 70,000.

Chinese companies are also expanding global presence. By the end of 2025, Chinese companies' investment in the U.S. was valued at $83.1 billion, accounting for 24.2 percent of the total stock of Chinese direct investment in developed economies, second only to the European Union, according to MOFCOM data.

Given the edges of the two countries in industrial structures and resources, there remains considerable room for growth in two-way investment. Greater transparency in regulatory frameworks and more effective policy coordination can reduce uncertainty for investors.

Across traditional manufacturing, agriculture, infrastructure and technology sectors, enterprises in China and the U.S. have a common interest in lowering costs, strengthening mutual trust and mitigating external risks through investment. Strengthening multi-level coordination in investment will provide stronger economic momentum for both countries to achieve their respective goals. 

In the first half of this year, China rolled out a series of measures to cope with external uncertainties including advancing the integration of trade and investment, expanding intermediate goods trade and promoting cross-border layout of industrial and supply chains. These initiatives have effectively bolstered foreign trade and helped Chinese companies actively explore international markets and pursue internationalization. In shaping their global footprint, Chinese companies will take into account emerging demand in the U.S. market and adjust their strategies accordingly, turning the market's growth potential into one of the drivers of their own development.

China-U.S. economic and trade relations still face considerable uncertainties, but areas where the interests of the two sides converge are increasing, providing stronger grounds for cooperation rather than confrontation. The two sides should continue to implement the important consensus reached by the two heads of state, jointly strengthen the resilience of economic and trade cooperation and create more favorable conditions for stable economic development in both countries and globally. BR

The author is a senior research fellow at the Institute of American and Oceania Studies of the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce 

Copyedited by G.P. Wilson 

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