Introduction

Xi Jinping’s visit to Washington in late September produced a notable easing of US–China trade tension. The two sides agreed to cut tariffs on about US$30 billion of each other’s goods, launched an AI dialogue, and extended their trade truce to 10 January. For companies that spent the last two years moving production out of China, the obvious question is whether any of this changes the plan. For now, the answer is mostly no.

What was agreed

The deal follows a “30-for-30” framework. Each side recommended around US$30 billion of “non-sensitive” imports, based on 2024 trade values, for better tariff treatment. China’s Commerce Ministry said tariffs on about 90% of the products on each list would return to most-favoured-nation rates. The recommendations came from the US–China Board of Trade, which was set up during President Trump’s visit to Beijing in May.

China also agreed to buy at least 10 million tonnes of US coal a year in 2027 and 2028. The White House has not yet said how large the cuts will be or when they take effect.

What was left out

Semiconductors, batteries and electric vehicles are excluded. These are the sectors where the strategic rivalry is sharpest and where most supply-chain decisions are being made. The wider tariff structure also stays in place. After the US Supreme Court struck down the emergency tariffs in February, Washington imposed a separate 12.5% levy on many Chinese goods, on top of existing Section 301 and Section 232 duties.

Henry Gao, a trade law professor at Singapore Management University, called the deal “less the demolition of a tariff wall than the opening of a safety valve”. He also noted that cuts made through domestic measures rather than treaty commitments can be easily reversed. Deborah Elms of the Hinrich Foundation called the cuts “mostly symbolic”, although she said the new mechanism could make future talks more serious.

What it means for China+N

The deal does not overturn the case for diversifying into Southeast Asia, for three reasons.

First, it covers a small share of trade, and the high-value sectors driving investment in Vietnam, Malaysia and Thailand are excluded. Second, the truce now runs only to 10 January, so the planning horizon is a matter of weeks. Third, the cuts can be reversed without much difficulty.

There is one area to watch. Several categories on the US list, such as textiles, household goods and seasonal products, compete directly with exports from Vietnam, Cambodia and Indonesia. If those cuts are implemented, Chinese suppliers will win back some price competitiveness in low-margin consumer goods. Buyers who switched suppliers mainly for tariff reasons may reconsider.

The “30-for-30” format may matter beyond this deal. Gao suggests it could become a template for quick, transactional agreements between Washington and other partners: concessions matched by dollar value, with strategic sectors protected. Asian governments negotiating with the US may be offered something similar.

Summary

The September deal is a confidence-building step, not a structural change. It cuts tariffs on a limited set of consumer and agricultural goods, keeps the strategic sectors off the table, and pushes the next deadline to January. For companies with China+N strategies, the main implications are a modest gain for Chinese suppliers in low-margin consumer goods and a possible new model for US trade deals. The broader case for diversification still holds.