The USTR is seeking public comments to design a US-China ‘Board of Trade,’ giving importers until July 10 to make the case that their China-sourced products belong on a limited list eligible for lower tariffs.
What's on the table: The June 5 Federal Register notice invites traders to help shape a government-to-government mechanism for what USTR calls “reciprocal managed trade” in non-sensitive goods, following the May Trump-Xi understanding.
Unlike the one-sided purchase quotas of the 2020 Phase One deal, the new approach would allow both sides to identify products and modify tariffs on equivalent values of imports from each other, with outcomes modified over time.
Reuters has reported that the tariff reductions could cover roughly $30 billion of goods per side. USTR would administer the mechanism under Section 301 of the Trade Act — the legally tested authority the administration has relied on since the Supreme Court invalidated its IEEPA tariff approach.
What the notice asks: Filers are being asked to identify:
Which China-sourced products should be classified as “non-sensitive”
Which goods currently subject to additional tariffs should revert to lower Column 1 (MFN) rates
Where tariff inversions exist — meaning an imported input faces a higher tariff than the finished product
USTR requires each submission to identify products at the 8-digit HS level and include average annual import values from 2022–2024. The term ‘non-sensitive’ is “inherently broad and subject to interpretation,” law firm Miller & Chevalier noted, which gives the industry substantial room to argue its products qualify.
Because the list is capped, early submissions will likely shape which products ultimately make the cut.
How others are handling it: The window comes after more than two years of companies engineering China out of their sourcing. Three big importers show how far the shift has progressed:
Nike is cutting China’s share of its US footwear imports from about 16% to the high single digits within a year, per management on its June earnings call
Apple has shifted roughly a quarter of iPhone output to India, Bloomberg reported
Williams-Sonoma has reduced its China sourcing from 50% to 25% in recent years while lifting gross margin to 47.1%
The catch: Sean Stein, president of the US-China Business Council, said the business community holds “deep reservations about the idea of managed trade,” warning it “could be inflationary and weaken US competitiveness.”
The precedent is mixed on follow-through: China hit only about 60% of its 2020 purchase target.
What to watch: Comments close due July 10 (docket USTR-2026-0430), with rebuttals due July 27, and early submissions could influence which products make the final basket.
As the mechanism is reciprocal, conditional, and easily reversible, it reads more as a planning signal for where targeted tariff relief may emerge rather than a reason to reverse diversification strategies already in place.
