FX.co ★ US and China agree on trade truce focused on oil, planes, and agriculture

Washington and Beijing have agreed to a trade truce, with both sides signaling a mutual reduction in tariffs following the summit between President Donald Trump and President Xi Jinping.

China’s Ministry of Commerce said bilateral councils will be created to coordinate concessions. The initial focus will be on agriculture. Both countries intend to remove non‑tariff barriers and cut duties on agricultural products, although the final list of goods to be covered has yet to be agreed upon.

A central element of the deal concerns industry. Beijing has agreed to resume purchases of US aircraft in return for firm US guarantees of uninterrupted supplies of aircraft engines and spare parts to China. President Trump also confirmed that China will begin acquiring US crude oil as part of the arrangement.

Trade teams from both sides are now working to finalize the legal text of the agreements.

The economic detente follows intense confrontation in 2025 and involves significant political concessions. The most contentious issue — US export controls on chips for artificial intelligence — was excluded from the package and remains unresolved.

Beijing did secure a diplomatic concession on its core demand over Taiwan. Hours after the meeting with Xi, President Trump publicly warned Taipei against declaring independence in remarks on Fox News, a statement that addressed a key Chinese concern about US policy and arms supplies to the island.