U.S.-China Trade Deal Can Deliver Unequal Tariff Savings
The Board of Trade's equal-value baskets can produce different tariff savings. Importers need the actual rate cuts, qualifying entries and duration to budget relief.
Primary lensTrade governance
Sub-topicOversight gap
Evidence base5 records used
Use caseGovernance watch
The U.S.-China Board of Trade can match the dollar value of goods receiving preferential treatment while delivering very different tariff savings on each side. Its published design uses equal trade value as a negotiating measure. A company's duty budget depends on the rate reduction applied to the merchandise it actually imports.
On September 25, U.S. Trade Representative Jamieson Greer said in his CNBC interview on the Board agreement that the two governments had reached agreements covering selected non-sensitive goods. He said more details would be released Monday, September 28. China's commerce ministry had reported multiple understandings the previous day in its account of the eighth round of talks. Neither that account nor Greer's interview supplied the product schedule, rates and effective dates needed to calculate an importer's savings.
For a U.S. importer's finance director preparing the 2027 duty budget, the task is to turn the eventual product package into a forecast of reduced payments. Until its terms are available, the headline trade value describes the scale of the negotiation. It cannot supply a savings estimate.
The negotiating unit is the value of goods
USTR's June 5 Board notice envisaged favorable changes to certain additional tariffs on equal values of non-sensitive trade. It asked commenters proposing products to provide average annual trade values for 2022 through 2024. That historical-data request does not establish the valuation period or method adopted in a final agreement.
Matching merchandise values leaves room for quite different concessions. A large basket receiving shallow cuts could yield less immediate relief than a smaller basket receiving deep cuts. Even identical final rates would tell little about the saving unless the starting rates were known.
This does not make unequal duty savings a breach of reciprocity. The notice contemplates equal trade values, not an undertaking to forgo identical amounts of tariff revenue. Nor would the customs arithmetic establish which country gains more overall. Changes in orders, prices and production would require a separate assessment.
Traverse's earlier analysis of the Board's product-eligibility record examines which goods belong in the basket. The financial question begins after selection, when a company measures what the concession removes from its own duty bill.
A $100 million basket can save $15 million or $5 million
An ad valorem duty applies a percentage rate to value. The CBP computation rule in 19 CFR 159.3 distinguishes that calculation from duties assessed on quantity. The examples below concern a percentage-based additional duty. Specific or compound duties require their own calculation.
Consider two hypothetical packages, each covering $100 million in customs value over the same period. All entries qualify, prices and quantities are held fixed, and every other duty and charge stays unchanged. Neither package represents a disclosed U.S. or Chinese offer.
Illustrative tariff savings on equal-value baskets, September 25, 2026. The comparison applies the percentage-duty method in 19 CFR 159.3 to invented rates. Different coverage, rates or periods would change the result.
Measure
Package A
Package B
Covered customs value
$100 million
$100 million
Additional duty rate before relief
25%
10%
Additional duty rate after relief
10%
5%
Direct duty saving
$15 million
$5 million
Package A delivers three times the saving despite ending with the higher rate. The reductions are 15 and 5 percentage points. A budget comparing only the final rates would miss the larger concession in Package A. Calling either package $100 million of tariff savings would confuse the value being taxed with the tax being removed.
The starting point also matters within a single package. If an importer already receives relief from the duty being reduced, it must calculate the additional benefit from its actual treatment. The same reduction cannot be counted twice. This comparison holds all other charges fixed to isolate the concession, rather than estimate a complete landed cost.
Historical trade does not forecast next year's entries
The customs value used in the calculation is distinct from retail sales or full landed cost. Census's valuation definitions describe the U.S. import value as generally the price paid or payable for export to the United States, excluding U.S. duties, international freight, insurance and related charges. The company's forecast should use the appropriate customs value for its expected entries.
That forecast may differ sharply from the earlier trade values collected during product selection. Suppliers, prices and order volumes may have changed. A category can account for a large share of the negotiating package but little of an individual importer's planned purchases.
Suppose Package A's covered products represented $100 million in an earlier period, while current qualifying imports are forecast at $40 million. The same 15-point reduction would then save $6 million. Carrying forward the old value would overstate the forecast by $9 million. This is a change in expected exposure, with the tariff concession held constant.
The statistical series requires care too. Census distinguishes general imports, including arrivals into bonded warehouses and foreign-trade zones, from imports for consumption. Its published calculated-duty figures do not necessarily equal duties paid. Those distinctions make aggregate statistics useful for checking scale, while the company's entry forecast and payment records remain the basis for its cash budget.
Put duration beside the rate cut
Duration can reverse the result in the table. If Package A applies for one quarter of a $100 million annual import program, with imports spread evenly, its eligible value is $25 million and its saving is $3.75 million. Package B's five-point reduction over a full year saves $5 million. These are hypothetical periods, not the Board's agreed terms.
Seasonal imports would require the actual expected entry schedule rather than an even quarterly split. A company placing most orders late in the year could receive much less benefit from relief that expires before those entries. The relevant period is the one specified for the tariff treatment, not the length of a wider diplomatic truce.
Greer also described an ambition to keep some goods outside future tariff disputes. Such protection could have value beyond the initial rate cut, but it would be contingent on later events. Avoiding a possible future increase is different from reducing today's bill. Adding both to immediate cash savings would turn an uncertain benefit into a booked concession.
The finance director should carry the current duty treatment into the base forecast and keep prospective Board savings in a separate scenario. Each estimate needs the affected duty, its before-and-after rates, qualifying customs value and the applicable entry period. The USTR managed-trade consultation record identifies the mechanism under negotiation. The operative product schedule and tariff terms will determine when that scenario can replace the baseline.
Once those records appear, the first budget revision should reconcile the announced basket with the company's expected qualifying entries. A reduction is worth booking only for the merchandise and period it reaches. That calculation will show whether the agreement changes the purchasing budget materially, however large the bilateral trade total looks.
From reading to review
Run the numbers on your lane.
The duty calculator runs the current stack for any HTS code and origin. A free account opens full tool output, AD/CVD detail, Chapter 98 processing, and available exports.