Businesses ‘frozen Out’ Of Trump’s Tariff Channel With China

Corporate America had high hopes that President Donald Trump’s plan for a trade forum with Chinese officials would give businesses a new way to influence tariff policies across the world’s two largest economies. They’re still being shut out.

Trump and Chinese President Xi Jinping are expected to provide some limited new details, including targets for future tariff cuts, when they meet later this week at the White House. But the private sector remains largely in the dark on even those plans, despite the launch of the U.S.-China Board of Trade after Trump and Xi’s last summit, according to half a dozen people from industry groups granted anonymity to discuss the deliberations. The administration, they say, has only communicated with a small number of major companies that trade with China on the future of the board, which will be made up of senior officials from both countries and could lay the groundwork for tens of billions of dollars worth of tariff reductions.

“It’s like parts of industry have been frozen out,” said one senior leader from a trade association, granted anonymity because they did not want to alienate the administration.

The lack of engagement is a blow to American companies, which had hoped the administration’s proposal last spring for a joint board of U.S. and Chinese economic officials would give them more influence on the countries’ roughly $500 billion trading relationship — specifically, to lobby for lower tariffs. And it underscores how limited Trump’s ambitions now are for the U.S.-China trade negotiations, which are focused primarily on maintaining the existing trade detente rather than dramatically altering the status quo.

The Board of Trade was one of the most high-profile products of Trump’s last summit with Xi, in Beijing in May. American officials, including U.S. Trade Representative Jamieson Greer, pitched the idea as a way to reach agreement on lowering tariffs on as much as $30 billion on both sides worth of “non-sensitive” products traded between the two countries, from soybeans to toy parts to low-tech manufacturing components. Major U.S. industries that rely on trade with China, including technology, retail and automakers, were hopeful the forum would create a streamlined process to request tariff reductions that could then be quickly implemented.

The Office of the U.S. Trade Representative asked the public to weigh in this June, quickly receiving more than 500 public comments from agricultural growers, sporting goods manufacturers, semiconductor suppliers and others. But the administration has provided few public updates since then and provided little guidance in private, either, said the six people.

“It’s been zilch for months,” said the trade association leader.

After meeting with his Chinese counterparts Sunday in New York, Greer told reporters that the U.S. and China have "operationalized" the board, adding that negotiations are ongoing and officials were still seeking to find a "critical mass" of products that could be "traded in a balanced way, and create a kind of ballast for the relationship."

He pointed to agricultural and energy products and medical devices as goods that could potentially receive future tariff cuts on the U.S. side, but did not clarify whether there would be announcements on that front during the summit.

“We expect that the types of goods you’ll see in those lists are consumer goods, low-tech items coming in from the Chinese side,” he added.

A USTR official, who was granted anonymity to discuss policy discussions, defended the administration’s outreach but indicated the tariff reductions would depend on ongoing negotiations with China.

“The Board of Trade is a policy process in which we’ve operationalized in part by consulting with the public transparently for recommendations of products for the outcome,” said the official. The person added that the administration is “currently negotiating with the Chinese” on types of goods that could be excluded from tariffs, subject to agreement from both countries’ leaders.

Beijing has also said little about how the board will function but did confirm talks are ongoing. Negotiators are working to implement reciprocal tariff reductions "at an early date," Chinese Commerce Ministry spokesperson Huang Ling said at a briefing last week.

A spokesperson for the White House did not return a request for comment.

The limited details and lack of a clear timeline have frustrated industry groups and Trump administration officials who hoped the new mechanism would snowball into a broader reset, potentially helping resolve long-standing disputes such as China's refusal to fully restart the flow of critical minerals used in everything from fighter jets to electric vehicles.

Private sector lobbyists now worry the administration is coalescing around a much narrower package of tariff reductions, like those granted during Trump's first-term trade war.

Chinese goods enter the U.S. under some of the highest tariffs of any major trading partner, duties that have been stacked on since Trump’s first term. The effective rate on many products now stands at around 30 percent or higher.

During Trump’s first term, companies could formally petition USTR to exclude specific products from those duties, with the agency reviewing and ruling on each request. The second Trump administration has not continued that practice. Instead, private companies seeking tariff relief have had to lobby the administration for one-off carveouts granted at its discretion.

Corporate interests had hoped the Board of Trade would recreate that more transparent, direct path for industries seeking tariff reductions. The administration for months has framed the board as a mechanism for the United States and China to identify “non-sensitive” goods they could trade more freely. The administration and the U.S. trade representative, however, never defined what would count as “non-sensitive” or explain how products would be selected, prompting a flurry of lobbying by companies seeking to persuade officials that their goods should qualify for lower tariffs.

“I hope there's serious conversations about trying to dial back the tariffs' intention on key goods for both the U.S. and for China,” said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation. “There’s real opportunity here through the Board of Trade to really kind of get after those non-sensitive areas. I hope both governments take advantage of that opportunity."

Chinese trade negotiators led by Vice Premier He Lifeng will conclude five days of talks with their U.S. counterparts on Wednesday, China’s state media reported last week, suggesting possible last-minute breakthroughs that could be added to the outcomes of the Trump-Xi summit on Thursday.

Negotiators may also be eyeing the rollout of more details on the Board of Trade and other trade-related outcomes at two potential subsequent meetings between Trump and Xi at the APEC leaders meeting in Shenzhen in November and the G20 leaders meeting in Miami in December.

In recent discussions, the administration has shown some openness to lowering tariffs on Chinese apparel and footwear imports as well as other products granted exemptions under the tariffs Trump imposed during his first administration, according to two of the people. Another China-based industry representative said the U.S. wants China to put planes and heavy machinery on the list of tariff reductions. Talks remain in the early stages, and details of the tariff reductions likely won’t be rolled out at this stage.

One of the people anticipated cuts amounting to a "sliver of a sliver."

"The companies we represent require much, much, much more broad reassurances than we have secured so far," the industry official said.

Even if the Board of Trade announces it will lower tariffs on select categories of "non-sensitive" products, the moves could quickly be reversed if U.S.-China tensions flare again, trade analysts and people close to the Trump administration caution.

"Nobody here believes that this is it — that the U.S. won't suddenly decide that T-shirts are a threat to national security and so all of a sudden we're to have more tariffs on them," said the China-based industry representative. "Nobody believes this is a permanent thing and there's no road map for where we go from here."

The indecision on all sides is sparking fears that the board may repeat the mistakes of the U.S.-China economic dialogues during the George W. Bush and Obama administrations, which the U.S.-China Economic and Security Review Commission and China hawks criticized for being long on talk and short on results. "There's always a risk that this kind of thing devolves into endless chit-chat," said Emily Kilcrease, a former deputy assistant U.S. trade representative during Trump's first term and under President Joe Biden.

The Trump administration’s last-minute planning for this summit has also left China experts and former government officials expecting few tangible results. “There’s been no serious preparation,” said Evan Medeiros, former senior director for Asia on the national security council in the Obama administration. “There’s not likely to be any serious deliverables and to the extent that this summit is about anything, it’s about optics.”

Beijing also still has yet to honor agreements the White House said it struck during Trump's meeting with Xi in Beijing in May. That includes a pledge to buy 200 Boeing aircraft and foot-dragging on purchasing $17 billion in agricultural products this year that Beijing has only recently begun to address. Furthermore, Beijing never confirmed key details trumpeted by the United States — including Trump's claim that China's Boeing order could climb as high as 750 planes.

"Lack of agreement on this could spill over into the sensitive product space and lead China again to restrict exports of rare earths and permanent magnets — that's serious stuff," said Chad Bown, former chief economist at the State Department in the Biden administration. A shutdown of that supply chain "can have a crippling effect on huge parts of the American economy."