ICAS Trade ‘n Tech Dispatch (online ISSN 2837-3863, print ISSN 2837-3855) is published about every two weeks throughout the year at 1919 M St NW, Suite 310, Washington, DC 20036.
The online version of ICAS Trade ‘n Tech Dispatch can be found at chinaus-icas.org/icas-trade-technology-program/tnt-dispatch/.
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Perhaps, smaller is better. In January 2020, the U.S. and China drew up an extravagant ‘Expanding Trade’ chapter in their Phase One economic agreement that included commitments from Beijing to import various U.S. goods and services over the next two years in a total amount that exceeded China’s annual level of imports for those goods and services in 2017 by no less than $200 billion. China’s commitments covered a variety of U.S. manufactured goods, food, agricultural and seafood products, energy products, and services. China predictably failed to hit its targets, purchasing about 60% of its commitments, leading to an outbreak of charges and countercharges, including a bitter white paper from China’s Commerce Ministry that was released shortly after the announcement of the Liberation Day reciprocal tariffs by President Trump in April 2025.
By contrast, the chartering of a modestly-sized Board of Trade to manage bilateral trade in “non-sensitive” items, which was a key deliverable at the May 14-15 Trump-Xi summit in Beijing, appears fit for purpose. Approximately $30 billion of each sides’ identified exports is to be subject to the most favored nation (MFN) rate (rather than the elevated rates currently), with further reductions and exemptions expected thereafter. At this time, both sides have agreed that agricultural products will be included within the US$ 30 billion list too. At the Xi-Trump summit, China had agreed to purchase at least $17 billion of agricultural exports in 2026, 2027 and 2028, plus stick to its November 2025 purchase commitment of at least 25 million metric tons of soyabeans annually through 2026, 2027 and 2028. Gradually, as trust is built in the process through the fulfilment of targets, the duty reductions/exemptions could be extended, asymmetrically, to a wider range of products. China has already signaled its willingness to do so – although in return for a stay on the U.S.’ buildout of its anti-China blacklists as well as export controls.
So, what should the U.S.’ overriding priorities be while populating its Board of Trade tariff reduction list? At home, duties on goods that raise consumer prices or undermine the competitiveness of U.S.-based manufacturing should be the top priority. In particular, Chinese intermediate goods that are embodied in finished U.S. products should be made eligible for tariff relief. The same holds true for non-sensitive upstream inputs that support U.S. downstream competitiveness in the electronics and other advanced sectors. In the Chinese market, on the other hand, the priorities for tariff reduction should focus on U.S. exports that face compressed margins from competing exporters, on U.S. medical devices and advanced industrial equipment, on commodity and energy exports such as crude oil and LNG, as well as all Chinese retaliatory agricultural tariffs. The removal of non-tariff barriers on agricultural biotechnology traits as well as a predictable pathway of approval for gene-edited products should be on the table too. A clearer definition of “non-sensitive” goods would help both sides also.
The U.S.-China Board of Trade is designed to function as “an adaptor mechanism to promote reciprocity, durability and balance” in bilateral trade ties. Implemented fairly and rigorously, it could lend a degree of support and stability to bilateral engagement and slow down the speed of U.S.-China decoupling of economic ties. Although to be clear, mechanisms such as the Board of Trade (and the so-far black-boxed Board of Investment) will require far greater cooperative engagement if they are to reverse the backsliding in recent years. The U.S.’ current trade deficit with China stands at its lowest point currently since 2005 and China’s share of total U.S. imports at its lowest point since Beijing joined the WTO in 2001. Balanced trade is ok; deepening of trade ties would be far better.
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Keeping an Eye On…
One gory step at a time, we are getting to know what ‘Restoring Gold Standard Science’ really means to the Trump administration. When it flaunted its Executive Order of the same title in May 2025, the administration had associated the term with a number of high-minded principles. ‘Gold Standard Science’ was science that was: reproducible; transparent; communicative of error and uncertainty; collaborative and interdisciplinary; skeptical of its findings and assumptions; structured for falsifiability of hypotheses; subject to unbiased peer review; accepting of negative results as positive outcomes; and without conflicts of interest. Like Vannevar Bush — a godfather of the U.S.’ mid-20th century scientific establishment — had famously posited eight decades ago, scientific progress would once again result “from the free play of free intellects, working on subjects of their own choice, in a manner dictated by their curiosity for exploration of the unknown.”
For those who haven’t been paying attention to the gutting of the federal government’s science bureaucracy, a less exalted view of the administration’s gold standard benchmark was laid bare in a proposed rule in late May under the anodyne title of “Regulation for Federal Financial Assistance.” Per the draft rule, whose abbreviated comment period closed on July 13 and for which the administration is eyeing an October final release, federal political appointees are to be empowered to review research grants to confirm that they “demonstrably advance the President’s priorities.” Those that don’t align could be subject to a “convenience termination” that would allow even ongoing clinical trials to be axed at any point. The proposed rule injects politics into the process of expert peer review, micromanages the running of laboratories, and more generally promotes scientific protectionism.
International scientific collaborations aren’t spared either. R&D awards are to be generally restricted to U.S. entities, with exceptions built in only when authorized by statute or approved by a senior administration appointee. Blanket restrictions are to apply across a range of research activities insofar as “covered foreign countries” are concerned. Just to make matters clear, the rule proposes a baseline prohibition on funding any scientific collaboration between U.S. scientists and any entity “owned or controlled” by the Chinese government, any entity “acting on behalf of” China, or affiliated with the Chinese military. Aside from decoupling the U.S. scientific community from its counterparts in China, the rule would also hollow out the bilateral Science and Technology Agreement (STA) that the two sides renewed during the closing months of the Biden administration.
It is worth nothing that China is no longer the mere pupil it used to be in the S&T field. The great asymmetry that used to exist a generation earlier between the two countries has more-or-less been whittled down, with Chinese researchers churning out numerous highly-cited papers. It is just as well worth noting that Beijing and Washington are each other’s top scientific partners, with collaborative research between U.S. and Chinese nationals being a standout feature among the most-cited papers. We know how the trade war between two peer powers, touched off by Trump’s ‘Liberation Day’ antics, has progressed. Will scientific protectionism now, in the name of political ideology, furnish the U.S.’ next own goal? And will it have to be a full two years-and-counting before this new scientific ‘gold standard’ can be taken down, much like the golden trinkets that currently adorn the Oval Office? For the sake of scientific endeavor, let’s hope that the deluge of comments against the proposed rule stirs an awakening within this tin-eared administration.
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