US and China Test New Trade Framework After Summit, With Drones and Rare Earths as Early Flashpoints
Following a summit between Presidents Xi Jinping and Trump, the US and China are establishing Boards of Trade and Investment to manage disputes, while simultaneously pursuing tariff actions and security reviews. The framework represents a shift from diplomatic rhetoric to institutional mechanisms designed to prevent individual trade conflicts from derailing the broader relationship. The arrangement's success depends on whether procedures can provide predictability for businesses operating across both economies amid persistent security concerns.
Less than three weeks after a summit between President Xi Jinping and US President Donald Trump, the two countries are moving to operationalize their agreement to build a more stable relationship through new institutional structures. The US Trade Representative has asked companies to identify Chinese goods eligible for tariff relief under a new Board of Trade, while simultaneously proposing Section 301 duties on imports from 60 economies following a forced labour investigation. Both leaders framed the relationship differently—Washington emphasized fairness and reciprocity, while Beijing stressed cooperation as the mainstay with competition kept within limits—yet both agreed on the need for institutional mechanisms. The framework aims to prevent disputes over tariffs, drones, rare earths, licensing, and market access from destabilizing the overall relationship. A key test case is DJI, the Chinese drone maker controlling over half of the US commercial drone market, which faces scrutiny after the FCC placed foreign-made drones on its security risk list.
What different sources said
- South China Morning PostCenter
How drones, tariffs and rare earths could test US-China detente
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