Tariffs Fall From 145% Peak to MFN: $60B US-China Deal Shifts Markets

Investors weighing the trade-policy risk premium just got a tangible data point: the September 28 lists cut tariffs on roughly $60 billion of bilateral goods, with 90%+ moving to single-digit MFN rates from a 145% peak in 2025. That is a measurable easing of the cost shock that has pressured importers, exporters, and inflation-sensitive sectors — and a signal on the durability of the US-China détente.

The United States and China on Monday, September 28, 2026, released reciprocal lists of nonsensitive products worth roughly $30 billion each — approximately $60 billion in combined bilateral trade value — that will receive tariff reductions, marking the most concrete milestone yet in the two economies' de-escalation of a trade war that at its peak imposed U.S. duties on Chinese goods as high as 145 percent. The announcement came days after Chinese President Xi Jinping met U.S. President Donald Trump in Washington for Xi's first state visit since 2015, tying the commercial détente directly to a broader political reset.

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Investors weighing the trade-policy risk premium just got a tangible data point: the September 28 lists cut tariffs on roughly $60 billion of bilateral goods, with 90%+ moving to single-digit MFN rates from a 145% peak in 2025.

The U.S. list covering American goods entering China comprises 1,619 items, spanning agricultural commodities, hair and personal care products, timber, medical equipment, and U.S. coal. China's reciprocal list for exports to the United States includes 77 categories, among them fireworks, tableware, toys such as dolls and puzzles, glass and wooden Christmas ornaments, and soccer balls. According to China's commerce ministry, more than 90 percent of the listed products will be subject to most-favored-nation rates — the standard single-digit duties applied under World Trade Organization rules — effectively eliminating country-specific tariffs across the covered basket. Most-favored-nation rates vary item by item but are typically in the single digits, a sharp contrast to the punitive levels seen during the dispute's peak.

U.S. Trade Representative Jamieson Greer said the lists were intentionally focused on "nonsensitive goods on each side that could benefit from more favorable tariff treatment," framing the deal as advancing market access for American farmers, manufacturers, businesses, and workers while benefiting U.S. consumers through cheaper imports of household goods and toys. Both governments indicated the lists could be adjusted later as needed, though amendments were expected to remain limited in scope, preserving a stable but flexible framework for managing the agreement.

The agreement formalizes a thaw that began after 2025, when U.S. tariffs on China peaked at 145 percent and were progressively rolled back as tensions eased. The normalization matters because the covered products sit at the center of everyday cross-border commerce: agricultural commodities and coal feed China's food and energy systems, while toys, tableware, and seasonal ornaments feed U.S. consumer demand heading into the fourth-quarter holiday cycle. Moving 90 percent of these goods back to single-digit MFN rates removes a punitive cost layer that had been embedded in procurement and pricing decisions for more than a year.

For supply chains, the lists signal a reopening of sourcing lanes rather than a wholesale reversal. The item-count asymmetry — 1,619 U.S. tariff lines versus 77 Chinese categories — reflects differences in tariff-line granularity more than value, since each side's basket is worth roughly $30 billion. Importers, logistics providers, and retailers can now re-model landed costs on a defined, published set of goods, reducing the uncertainty that had driven inventory hoarding and supplier diversification. The explicit inclusion of U.S. coal also carries energy-security overtones for China, which has balanced trade friction against its import needs.