China’s US envoy calls for 10-fold rise in tariff-free trade under joint board

Chinese ambassador to the United States Xie Feng on Wednesday proposed to increase the limit of tariff-free goods under the newly created US-China Board of Trade from the existing US$30 billion to US$300 billion – a 10-fold rise in non-sensitive trade covered by the mechanism.
Addressing a gathering at the US-China Business Council gala in Washington, Xie said he shared the view of “many friends from American businesses” that the tariff-free basket was “far from big enough”.
“I cannot agree more. If we take into account the scale of overall bilateral trade, there is still a reason for making the list of exemptions longer,” Xie added.
“Personally, I would argue for doubling the number to US$60 billion, or even raising it to US$300 billion.”
According to figures from the US Trade Representative’s office, the goods trade between China and the US totalled an estimated $414 billion in 2025.

The board of trade was one of the major outcomes of US President Donald Trump’s recent visit to China, with the two sides agreeing to select non-sensitive sectors and products from each side to manage a tariff-free trade mechanism.
Earlier this month, the USTR office announced a public comment process, calling for inputs on the scope and scale of the initiative.
In his remarks, Xie also took a swipe at the Pentagon’s recent move to label leading Chinese technology firms as military-linked entities, hoping that the “reasonable concerns of Chinese enterprises will be addressed as soon as possible”.
“Export control restrictions on two-way investments, anti-monopoly investigations and blacklists, such as the list of designated foreign military companies, should not be used as tools to suppress business,” he added.
Last week, the US defence department classified more than 60 Chinese companies, including Alibaba, Baidu and BYD, as “Chinese military companies operating in the United States”.
The US ambassador to China, David Perdue, also delivered a recorded video message from Beijing, targeting the country over its export controls on rare earths last year.
“The recent export controls on rare earths demonstrated that depending on one country for critical inputs is deeply risky, especially when those supply chains are exploited for geopolitical leverage,” he noted.
Perdue also highlighted State Council decrees 834 and 835 – the latest additions to Beijing’s economic toolkit that provide a legal framework to strengthen China’s supply chain security and respond to foreign laws and enforcement measures.
“Recently, we’ve seen China’s State Council issue decrees 834 and 835 that threaten foreign companies with criminal charges and a range of other serious penalties simply for complying with the laws of their home countries,” he added.
China argued that the measures are intended to fight “unlawful extraterritorial jurisdiction” such as secondary sanctions.
The remarks reflected the underlying tensions as both sides prepare for President Xi Jinping’s visit to the United States in September, marking his second meeting with Trump in four months.
During his trip to China in May, Trump secured Chinese commitments to buy US farm goods and 200 Boeing planes. Both sides also announced the establishment of boards of trade and investment, and aim to create “a constructive relationship of strategic stability”.
Major areas of disagreement, including tariffs, export controls, rare earths and advanced semiconductors, went largely unaddressed.
Since the summit, the Trump administration has taken several hardline steps, testing the “consensus” reached in Beijing.

Apart from Pentagon’s listings, earlier this month, the US Trade Representative (USTR) proposed tariffs of 10-12.5 per cent on 60 countries, including China, under Section 301 of the 1974 Trade Act, citing allegations of forced labour.
The administration is preparing a fresh round of Section 301 tariffs targeting excess capacity and manufacturing overproduction, widely viewed as an attempt to revive duties that the Supreme Court struck down in February.
According to a recent US-China Business Council member survey, the Trump administration’s export controls, sanctions and tariffs are hurting American firms in China without meeting their stated goals of blocking critical technology or reviving US manufacturing.
Nearly half of the Council’s 175 respondents were affected by US export controls and sanctions, with around 61 per cent of those firms losing sales to Chinese competitors – a five-point increase from 2025.
Outgoing Republican Senator Steve Daines, who recently led a bipartisan delegation to China, said he was in the “engage, compete and not to isolate” camp.
“Competition is a good thing. Let’s compete. Let’s engage. We’re not going to be able to slow China down. We’ve got to find ways to speed America up,” he advised.

He is part of a growing list of lawmakers challenging the so-called Washington consensus in favour of a more hawkish approach towards China.
Long-time China hardliners in Congress, led by House Select Committee on China chairman John Moolenaar, have vowed to fight back. The Republican Congressman from Michigan has pledged to counter what he calls the Communist Party’s “economic and national security threats” and raise awareness of the risks “it poses to the American people”.
Over the past nine months, two bipartisan congressional delegations have visited the country, stressing the importance of continuing engagement with Beijing.
Public polling also points to growing support for a less adversarial relationship, with surveys showing rising favourability towards China across both Republican and Democratic respondents, especially among younger Americans.
An April Pew Research Centre survey found that Beijing’s favourability among Americans increased by six percentage points to 23 per cent, doubling from 2023 levels, with younger respondents across both parties more inclined to see China as a competitor rather than an adversary.