The US president is set to agree on a new framework for US-China commerce at his summit with Xi Jinping, signalling Washington's acceptance of Beijing's state-dominated economic system after decades of failed attempts at reform. The Board of Trade proposal would manage which products can be traded between the two nations, but business leaders and trade experts warn of implementation challenges and inflationary risks.
President Donald Trump’s upcoming summit with Chinese President Xi Jinping in Beijing on 14-15 May 2026 is expected to introduce a fundamental change in how the US manages its economic relationship with China.
The proposed Board of Trade framework signals that Washington has abandoned decades of efforts to transform China’s state-dominated economy and will instead work within the existing system.
A Pragmatic turn after years of frustration
The new approach reflects widespread frustration across multiple US administrations that have failed to pressure China into liberalising its economy. Despite years of pushing Beijing to reduce export subsidies and currency undervaluation, China continues to rely on state support for its export sector, which has damaged American industries and deepened voter scepticism about Washington’s ability to counter the Chinese challenge.
The Board of Trade concept emerged from March 2026 discussions between US Trade Representative Jamieson Greer, Treasury Secretary Scott Bessent, and Chinese Vice Premier He Lifeng in Paris.
The framework would establish clear boundaries on what products the two nations can trade during tense periods while permanently blocking sensitive items like advanced semiconductors. Negotiators are reportedly working toward a 30 for 30 approach, identifying approximately USD 30 billion to 40 billion worth of imports on each side that would receive favourable tariff treatment.
According to US government statistics, China exported USD 308.4 billion in goods to America in 2025, while the US sent USD 106.3 billion to China, leaving a trade deficit of USD 202.1 billion.
At one point in April 2025, US tariffs on most Chinese imports reached 147.6%. By February 2026, the effective rate had decreased to 31.6%, still nearly triple the 10.7% rate from January 2025, based on analysis from the Penn Wharton Budget Model.
Echoes of past trade battles
The managed trade approach recalls the early 1990s when the Clinton administration attempted to force Japan to accept numerical targets for US exports. After 18 difficult months of framework talks and threats of tariffs, the US ultimately retreated and negotiated a traditional free-trade agreement instead. Asian nations had united with Japan against the US demands, fearing they would be targeted next.
Wendy Cutler, a former US trade negotiator who worked under both Republican and Democratic administrations, describes the current approach as realistic, noting that attempting to reset the relationship through new rules has proven futile.
However, critics like Jorg Wuttke, former head of the European Chamber of Commerce in China, argue that the plan shows China has won the long game. The original 2001 vision that bringing China into the World Trade Organisation would make it more Western has been reversed.
Business concerns and implementation challenges
The business community remains wary of the proposal. Sean Stein, president of the US-China Business Council, expressed deep reservations about managed trade, citing insufficient information sharing and concerns about inflation and weakened competitiveness.
Trade consultant Myron Brilliant, formerly with the US Chamber of Commerce, criticized the administration for not taking a long-term approach to confront systemic risks in the US-China relationship.
Implementation details could prove difficult. Defining non-sensitive goods and policing any agreement would require significant resources. The government’s broad discretion in determining which products receive favourable treatment invites lobbying pressure from various industries. The US is prioritising tariff cuts for agricultural products like soybeans, corn, and beef, while Beijing has already granted exemptions for medical and scientific equipment it needs.
While the latest USTR report details 52 pages of complaints against China—including subsidies, forced technology transfers, and unfair pricing—the new framework would leave these systemic issues unresolved. This marks a significant retreat from 2018, when the US presented such extensive demands that an adviser joked it was like China asking America to rewrite its constitution.
The subsequent 2020 Phase One deal also failed, with China never fulfilling its pledge to buy an additional USD 200 billion in US goods.
