USTR Requests Public Comments on the Scope and Nature of the U.S.-China Board of Trade

On June 2, the Office of the U.S. Trade Representative (USTR) initiated a public comment process to guide the development of the U.S.-China Board of Trade. The mechanism is meant to manage bilateral trade between the United States and China across nonsensitive goods and sectors, primarily through the modification of tariff rates. Public comment is sought on the specific types of both U.S. and Chinese goods that could benefit from such treatment, and how to best structure the Board of Trade itself. Comments must be submitted by July 10. Rebuttals or responses to the initial comments must be submitted separately by July 27.

Background

The U.S.-China Board of Trade was a key deliverable produced by the mid-May Beijing summit between President Trump and Xi Jinping. The mechanism is intended to manage bilateral trade of goods in nonsensitive areas that would not violate the national security goals or red lines of either country. Senior U.S. officials such as Treasury Secretary Scott Bessent repeatedly floated an initial $30 billion worth of nonsensitive goods the Board of Trade could manage, without detailing what those goods or sectors could be. Coming out of the summit, USTR Jamieson Greer signaled the administration’s intent to initiate a public comment process to guide the formation of the Board of Trade from the U.S. perspective.

Public Comment Notice

Proposed Structure

In the public comment notice, USTR refers to the Board of Trade as an “adapter” to resolve fundamental differences in the economic and market structures of the two countries and promote “reciprocity and durability” in the U.S.-China trade relationship. The two sides will consider tariff modifications on imports “of an equal value” while evaluating the outcomes of such relief over time. Each side will identify nonsensitive products and negotiate an agreement to modify certain non-most-favored-nation (MFN) tariffs imposed by either side. USTR envisions that additional tariffs “imposed through certain U.S. authorities” could be favorably modified because of these negotiations. While the notice does not name specific authorities, likely targets would be tariffs imposed under Section 232 and Section 301 of the 1974 Trade Act. With such an arrangement, USTR could better “monitor and evaluate certain U.S.-China trade flows based on a fixed amount of trade.” 

Request for Comment – Coverage of Goods

USTR is seeking input across a variety of different questions related to the structure and covered goods under the Board of Trade. Comments are due by July 10. USTR is seeking stakeholder input on the type of Chinese products or Chinese economic sectors that should be considered nonsensitive due to the minimal to nonexistent threat posed to U.S. national security and supply chain resilience efforts. The agency also asks what specific Chinese products should see their cumulative tariff rate reduced, and how U.S. consumers would benefit from such a reduction.

USTR also wants more information about the impact of tariffs on certain downstream manufacturing products. USTR is inviting comments about cases in which the tariff on a manufacturing input is higher than its downstream finished product, and how U.S. manufacturers and producers would benefit from modifications to tariffs on certain goods. USTR also wants stakeholders to describe U.S. products that American producers should be able to export to China at lower rates, as part of the agency’s effort to identify goods on which China should lower tariffs. The public comment notice asks stakeholders to further detail whether such U.S. products are agricultural products or industrial products whose export to China has declined significantly in the past several years. Finally, USTR asks commenters to identify U.S. goods that China appears to heavily rely upon.

Request for Comment – Board Structure

USTR asks stakeholders for input on the foundational mechanics of the Board of Trade. The agency seeks information on how often the board should convene in order to effectively monitor the balance of trade flows and judge the efficacy of active tariff modification arrangements. The notice also asks commenters to identify mechanisms through which the administration could ensure effective trade data sharing with China to allow for “optimal functioning.” Finally, USTR asks stakeholders how the board should assess when and whether to modify the scope of identified nonsensitive products.

Implications

The public comment notice represents the first step in the Trump administration’s formation of the Board of Trade. Following the public comment period, USTR will likely release an initial determination that identifies the nonsensitive goods and sectors meant to serve as the board’s foundation and proposes corresponding tariff modifications. Stakeholders will then likely have another opportunity to weigh in on the proposed structure and scope of the Board of Trade through public comment and public hearings. The administration will use stakeholder feedback during this consultation process to inform negotiations with the Chinese government and USTR’s final determination.

The public consultation process and accompanying bilateral government negotiations to finalize the Board of Trade are meant to create a durable mechanism that both sides can revisit during future visits, summits and bilateral talks. The next major flashpoint of U.S.-China relations occurs in November, when Beijing’s pause on heightened rare earth export controls is slated to expire, and similar pauses on increases to U.S. Section 301 tariffs. Neither side was successful in gaining concessions on either issue during the May summit in Beijing, with USTR Jamieson Greer giving the Chinese government a “passing grade” on their handling of rare earth exports to the United States. The trade chief also asserted that geopolitical issues, such as U.S. arms sales to Taiwan, would not bleed into the negotiation or management of the Board of Trade. President Xi is expected to visit the White House on Sept. 24, with both sides signaling an intent to meet alongside major multilateral events such as the G20 summit in December and APEC meeting in November. Both sides will likely pursue substantive progress on the board’s formation ahead of these flashpoints to create additional opportunities for positive engagement.

Next Steps

Written comments must be submitted by July 10. Any rebuttals or responses to those comments must be submitted to a separate docket by July 27. Certain aspects of a comment submission, such as sensitive business information and certain trade data, will be held confidential by USTR and not be viewable to the public. The docket for public comments has not yet been published.

Brownstein stands ready to assist impacted stakeholders in navigating their response to the Board of Trade public comment process and managing associated risks. Our team can help assess and respond to issues such as:

• Preparing and engaging initial public comments and subsequent rebuttals or responses;
• Identifying Chinese goods that qualify as nonsensitive and building a record to advocate for their inclusion in the Board of Trade’s covered goods list;
• Identifying U.S. products with declining Chinese market access, especially agricultural and industrial goods, and building a record to support their inclusion in bilateral tariff reduction negotiations;
• Arguing for exclusion of specific Chinese goods from nonsensitive treatment on national security or supply chain resilience grounds;
• Assessing exposure to Section 301 or Section 232 tariffs on specific inputs and developing a strategy to pursue relief through the Board of Trade; and
• Monitoring the Board of Trade’s development across the full comment-to-final determination cycle and advising on strategic intervention points.

For additional insights into the state of U.S.-China relations or assistance in pursuing engagement with the Trump administration on trade issues, please contact a member of the Brownstein team.

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