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Notice2026-11291

Request for Comments on the Scope and Operation of a Mechanism To Promote Reciprocal Managed Trade With China

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Published
June 5, 2026

Issuing agencies

Trade Representative, Office of United States

Abstract

USTR invites comments from interested parties to inform the development of negotiations with China aimed at optimizing bilateral trade in non-sensitive products in order to promote reciprocity and balance in the U.S.-China trade relationship. In particular, comment is sought on the types of non-sensitive products that would benefit from favorable tariff modifications by both sides, and considerations around the design of a new government-to-government mechanism--a U.S.-China Board of Trade--to manage bilateral trade optimization on an ongoing basis.

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<title>Federal Register, Volume 91 Issue 108 (Friday, June 5, 2026)</title>
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[Federal Register Volume 91, Number 108 (Friday, June 5, 2026)]
[Notices]
[Pages 34269-34272]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-11291]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE


Request for Comments on the Scope and Operation of a Mechanism To 
Promote Reciprocal Managed Trade With China

AGENCY: Office of the United States Trade Representative (USTR).

ACTION: Request for comments.

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SUMMARY: USTR invites comments from interested parties to inform the 
development of negotiations with China aimed at optimizing bilateral 
trade in non-sensitive products in order to promote reciprocity and 
balance in the U.S.-China trade relationship. In particular, comment is 
sought on the types of non-sensitive products that would benefit from 
favorable tariff modifications by both sides, and considerations around 
the design of a new government-to-government mechanism--a U.S.-China 
Board of Trade--to manage bilateral trade optimization on an ongoing 
basis.

DATES: To be assured of consideration, please submit written comments 
regarding the topics listed in section II, below, to the public docket 
by July 10, 2026. Any rebuttals or responses to those comments may be 
submitted to a separate public docket by July 27, 2026.

ADDRESSES: Submit written comments through the online USTR portal: 
<a href="https://comments.ustr.gov/s/">https://comments.ustr.gov/s/</a>. Follow the instructions for submission in 
section III below. For alternatives to online submissions, please 
contact Terry McCartin, AUSTR for China, Mongolia, and Taiwan Affairs, 
at <a href="/cdn-cgi/l/email-protection#b4e0d1c6c6cdebf9d7f7d5c6c0dddaf4e1e7e0e69af1fbe49af3fbe2"><span class="__cf_email__" data-cfemail="0d59687f7f7452406e4e6c7f7964634d585e595f2348425d234a425b">[email&#160;protected]</span></a> or 202-395-9487.

FOR FURTHER INFORMATION CONTACT: Terry McCartin, AUSTR for China, 
Mongolia, and Taiwan Affairs, at <a href="/cdn-cgi/l/email-protection#16427364646f495b75557764627f7856434542443853594638515940"><span class="__cf_email__" data-cfemail="74201106060d2b3917371506001d1a34212720265a313b245a333b22">[email&#160;protected]</span></a> or 202-
395-9487.

SUPPLEMENTARY INFORMATION: 

[[Page 34270]]

I. Background

Historic U.S.-China Economic and Trade Relations

    The trade relationship between the United States and the People's 
Republic of China (China or the PRC) has been defined by various modes 
and methods of engagement. President Nixon's visit to China in 1972 
ended a period of 23 years without official diplomatic ties between the 
United States and China. President Nixon embarked on a new relationship 
with a country whose single-party government had isolated itself from 
much of the world. Our relationship with China was, in many respects, 
starting from scratch, and, from the outset, was marked by significant 
differences in the two countries' economic and political systems.
    Ideological differences, political complexities, and other 
obstacles meant that it took seven years after President Nixon's visit 
for the United States and China to normalize relations, which occurred 
in 1979. Our bilateral relationship has undergone a phased evolution 
ever since, requiring special attention and skilled navigation. China 
is not like other trading partners: it is a non-market economy and 
strategic competitor; our modern history of commerce and diplomatic 
engagement is relatively brief; and our economic trajectories are at 
once mismatched and yet closely interwoven. But the United States and 
China are the two largest economies in the world, and it is possible 
for each country to derive benefits from trade with the other in 
discrete ways.
    Since the 1970s, our bilateral trade relationship has moved through 
different phases as circumstances have changed. In 1986, China formally 
requested to join the modern, multilateral trading system. China's 
accession to the World Trade organization (WTO) was a 15-year process 
of intense negotiation. During that time, the United States granted 
China most-favored-nation (MFN) treatment on an annual basis subject to 
review by Congress under Title IV of the Trade Act of 1974. The U.S.-
China Relations Act of 2000, which ended the yearly Congressional 
review of MFN treatment of China, granted China permanent normal trade 
relations and paved the way for China's entry into the WTO in 2001. It 
also established mechanisms for managing the bilateral relationship, 
including a requirement that the U.S. Trade Representative submit 
annual reports to Congress regarding China's compliance with its WTO 
commitments and the creation of a temporary, China-specific safeguard 
to restrict surges of imports from China under Section 421.
    Since China's WTO accession, the phases of U.S.-China engagement 
have been defined by a recognition of the unique and evolving 
challenges posed by the continuing lack of fairness, reciprocity, and 
balance in the bilateral trade relationship. In the first five years 
following China's accession to the WTO in 2001, the United States 
failed to aggressively enforce China's trade commitments, choosing 
instead to advocate for domestic liberalization efforts and reforms in 
China. During this period, China revised or repealed many laws, 
regulations, and other measures required under the terms of its WTO 
accession, while maintaining problematic acts, policies, and practices 
that harmed U.S. workers and businesses. When it became clear that 
China was not coming into conformity with its WTO commitments and China 
was not transitioning toward a market economy, as it had agreed to 
under the terms of its accession to the WTO, the United States took a 
new dual-track approach. In 2006, USTR released the first-ever Top-to-
Bottom Review (TBR) of the U.S.-China trade relationship. As 
recommended by the TBR, the United States brought numerous disputes at 
the WTO against China, while also pursuing high-level dialogues aimed 
at securing China's compliance with its WTO obligations and encouraging 
China to pursue market-oriented reforms.
    By 2016, a decade and a half after China's entry into the WTO, it 
was clear that the dual-track approach had failed. U.S. government 
enforcement efforts largely were not backed up by the political will of 
previous U.S. presidents or the most senior U.S. policy makers. WTO 
litigation and high-level dialogues had proven incapable of securing 
significant changes in China's approach to its economy and trade. 
Without such changes, China's approach to its economy and trade was a 
major factor in the United States' loss of 3.7 million jobs to the 
post-accession ``China Shock'' of the early 2000s.
    The United States tried another, new approach in 2018 when 
President Trump initiated an investigation under Section 301 of the 
Trade Act of 1974 (Section 301) into China's acts, policies, and 
practices related to technology transfer, intellectual property, and 
innovation. After using this established statutory mechanism to first 
document and then address China's unfair and burdensome practices 
through additional tariffs, President Trump entered into negotiations 
with China. After balking at a more-ambitious effort to optimize trade 
relations, China ultimately agreed to the Economic and Trade Agreement 
Between the Government of the United States of America and the 
Government of the People's Republic of China (Phase One Agreement) in 
January 2020. This historic agreement required structural reforms and 
other changes to China's economic and trade regime in the areas of 
intellectual property, forced technology transfer, agriculture, 
financial services, and currency and foreign exchange. The agreement 
also included a commitment by China to make substantial purchases of 
U.S. goods and services over a set timeline, along with a robust 
dispute resolution mechanism to ensure implementation and enforcement. 
However, concerns have arisen regarding China's implementation of 
several of these commitments, and the Biden Administration failed to 
enforce the agreement.
    In September 2024, USTR concluded a four-year review of the Section 
301 investigation that led to the Phase One Agreement, maintaining 
existing Section 301 tariffs and increasing tariffs on certain 
strategic sectors through 2026. Should USTR initiate a second, 
statutorily mandated four-year review later this year, interested 
stakeholders will have an additional opportunity to assess the impact 
and application of the Section 301 tariff actions on U.S.-China trade.

Recent Developments in U.S. China Economic and Trade Relations; 
Managing U.S.-China Trade

    In 2025, President Trump imposed global as well as China-specific 
tariffs on economic and national security grounds. Following these 
actions and subsequent U.S.-China negotiations in Geneva, London, 
Stockholm, Madrid, and Kuala Lumpur--culminating in a trade and 
economic deal between the United States and China agreed by Presidents 
Trump and Xi in Busan--the U.S.-China trade relationship entered a new 
phase. This new phase, appropriately, requires a new approach: managed 
trade. In further talks in Paris, Seoul, and then as part of President 
Trump's May 2026 visit to Beijing, the United States and China 
developed a new mechanism to manage the bilateral trade relationship. 
Announced as part of a package of outcomes from President Trump's 
visit, the U.S.-China Board of Trade will be a government-to-government 
channel for discussions on how to optimize the trade of non-sensitive 
products.
    The U.S.-China Board of Trade is a positive way to manage the 
realities of

[[Page 34271]]

the U.S.-China economic relationship and the imperative to defend 
American workers and industries from negative aspects of trading with 
China. The American and Chinese economies function very differently and 
have fundamentally different objectives and guiding principles. The 
U.S.-China Board of Trade will function as an ``adapter'' mechanism to 
promote reciprocity, durability, and balance in the U.S.-China trade 
relationship. As long as China maintains its non-market policies and 
practices and refuses to provide reciprocal treatment to U.S. exports--
such as disregard for intellectual property rights, subsidies and other 
industrial policies creating systemic overcapacity and overproduction 
in industrial sectors, diverse and deeply entrenched market access 
barriers, and lack of regulatory transparency--the United States likely 
will continue to rely on tariffs and other tools to manage trade with 
China. However, through the U.S.-China Board of Trade, the United 
States and China will consider tariff modifications on imports of an 
equal value of non-sensitive goods from each side, while monitoring and 
evaluating outcomes over time.
    Specifically, under this approach, each side would identify non-
sensitive products and come to agreement to modify certain non-MFN 
tariffs imposed by the other side. The United States envisions that 
additional tariffs imposed through certain U.S. authorities could be 
favorably modified as a result of the negotiations, provided that any 
modifications would not conflict with U.S. law or economic or national 
security interests, and that any conditions related to tariff 
modifications are satisfied. Meanwhile, China would be expected to 
modify tariffs that it has imposed on the United States.
    If such an arrangement can be negotiated successfully, the United 
States can monitor and evaluate certain U.S.-China trade flows based on 
a fixed amount of trade.

Summary

    The past fifty years make clear that prior U.S. approaches to its 
economic and trade relationship with China have not resulted in a more 
fair, reciprocal, or balanced relationship, nor has that relationship 
been stable, durable, or mutually prosperous. Both new and long-
standing U.S. tariffs have worked effectively to bring bilateral trade 
closer to balance. The U.S. trade deficit in goods with China fell by 
approximately 32% year-over-year to $202 billion in 2025, the lowest it 
has been since 2004. In March 2026, the U.S. goods trade deficit with 
China was down 46% year-over-year. In this period of economic 
adjustment, the United States will maintain trade ties with China and 
seek to identify and promote balanced trade in non-sensitive goods by 
considering the modification of certain non-MFN tariffs. The United 
States expects that this approach will bring economic benefits to U.S. 
farmers, ranchers, fishermen, small businesses, manufacturers, and 
workers, along with their communities, as well as for those who produce 
non-sensitive goods in China.
    To inform this new phase of engagement, USTR seeks public comment 
on effective ways to manage bilateral trade with China, including 
through the type of approach discussed above.

II. Topics on Which USTR Seeks Information

    To inform its consideration of a managed trade mechanism for 
balance and reciprocity with China, USTR invites comments from 
interested parties on any or all of the following topics:

A. Product Eligibility for Potential Tariff Modification

    Where applicable, products should be identified at the HS 8-digit 
level.
    1. What types of Chinese products, or Chinese products in 
particular sectors, should be considered non-sensitive in that they 
give rise to few, if any, issues related to economic and national 
security and supply chain resilience risks?
    2. What products of China, currently subject to additional U.S. 
tariffs, should the United States import at lower tariff rates, such as 
MFN (Column 1) rates? Please provide the average annual value of U.S. 
imports of those products from China in 2022-2024.
    3. Which, if any, U.S. consumers would benefit from this tariff 
modification?
    4. Which, if any, U.S. consumers would be harmed from this tariff 
modification?
    5. Which, if any, U.S. workers or producers would benefit from this 
tariff reduction modification?
    6. Which, if any, U.S. workers or producers would be harmed from 
this tariff modification?
    7. For a product identified in response to question 2 above, has 
the tariff on that product resulted in a tariff inversion whereby the 
tariff is higher on a given manufacturing input than on the downstream 
finished product? (Please specify the average differential between the 
tariff on the component at issue and the tariff on the relevant 
downstream product.)
    8. What is China's share of U.S. imports of each product identified 
in response to question 2? Please identify the product(s) and the 
market share.
    9. Which, if any, products of the United States, currently subject 
to additional Chinese tariffs, should U.S. exporters be able to sell to 
the Chinese market at China's MFN rates? Please provide the average 
annual value of U.S. exports of those products to China in 2022-2024.
    10. Is any product identified in response to question 9 above (a) 
an ``agricultural product,'' defined as products covered by and listed 
in Annex 1 of the WTO Agreement on Agriculture; (b) an industrial 
product the export of which to China has declined significantly in 
recent years; or (c) a product subject to multiple Chinese tariff 
actions or exceptionally high Chinese tariffs?
    11. Are there products that China still purchases, or would likely 
purchase, from the United States notwithstanding China's additional 
tariffs above the MFN rate? Put differently, are there U.S. products 
currently subject to China's tariffs above the applicable MFN rates 
whose exports to China have not been significantly affected by China's 
tariffs, or for which China appears to be reliant on U.S. exports?

B. Establishment of a U.S.-China Board of Trade

    1. How frequently should the U.S.-China Board of Trade convene in 
order to effectively monitor the balance of trade flows (in terms of 
dollar value and timing) and to ensure the effectiveness of the list of 
products identified as non-sensitive for the purpose of the tariff 
modification arrangement discussed above?
    2. How should the U.S.-China Board of Trade assess when, and 
whether, to modify the composition or scope of the identified non-
sensitive products?
    3. What mechanism should be established to ensure the effective 
sharing of trade data between the two sides to allow for optimal 
functioning of the U.S.-China Board of Trade?
    Nothing in this notice shall be construed to impair or otherwise 
affect requirements and processes stipulated under applicable U.S. 
laws.

III. Submission Instructions

    You must submit written comments in response to this notice using 
the appropriate docket on the portal at <a href="https://comments.ustr.gov/s/">https://comments.ustr.gov/s/</a>. 
To make a submission, use docket number USTR-2026-0430 entitled 
``Request for

[[Page 34272]]

Comments on the Scope and Operation of a Mechanism to Promote 
Reciprocal Managed Trade with China.'' To make a rebuttal or a 
response, use docket number USTR-2026-0431 entitled ``Rebuttal/Response 
to Comments on the Scope and Operation of a Mechanism to Promote 
Reciprocal Managed Trade with China.'' You do not need to establish an 
account to submit comments. The first screen allows you to enter 
identification and contact information. Third-party organizations such 
as law firms, trade associations, or customs brokers should identify 
the full legal name of the organization they represent and identify the 
primary point of contact for the submission. Fields with a gray 
Business Confidential Information (BCI) notation are for BCI 
information that will not be made publicly available. Fields with a 
green (Public) notation will be viewable by the public. After entering 
the identification and contact information, you can complete the 
remainder of the comment, or any portion of it, by clicking `Next.'
    You may upload documents at the end of the form and indicate 
whether USTR should treat the documents as business confidential or 
public information. Any page containing BCI must be clearly marked 
`BUSINESS CONFIDENTIAL' on the top of that page and the submission 
should clearly indicate, via brackets, highlighting, or other means, 
the specific information that is BCI. If you request business 
confidential treatment, you must certify in writing that the 
information would not customarily be released to the public. Parties 
uploading attachments containing BCI also must submit a public version 
of their comments. If these procedures are not sufficient to protect 
BCI or otherwise protect business interests, please contact Terry 
McCartin, AUSTR for China, Mongolia, and Taiwan Affairs, at 
<a href="/cdn-cgi/l/email-protection#fbaf9e898982a4b698b89a898f9295bbaea8afa9d5beb4abd5bcb4ad"><span class="__cf_email__" data-cfemail="3e6a5b4c4c4761735d7d5f4c4a57507e6b6d6a6c107b716e10797168">[email&#160;protected]</span></a> or 202-395-9487 to discuss whether 
alternative arrangements are possible.
    USTR will post attachments uploaded to the docket for public 
inspection, except for properly designated BCI. You can view 
submissions on USTR's electronic portal at <a href="https://comments.ustr.gov/s/">https://comments.ustr.gov/s/</a>.

Bryan R. Switzer,
Deputy United States Trade Representative, Office of the United States 
Trade Representative.
[FR Doc. 2026-11291 Filed 6-4-26; 8:45 am]
BILLING CODE 3390-F4-P


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