WASHINGTON, October 3, 2026 – Another master class in strategic negotiation took place in the global trade environment. After negotiations held in Washington, the U.S. and China reached an agreement to lower tariffs on $30 billion of non-sensitive products. In addition to reducing economic tensions, the two countries decided to open a dialogue on artificial intelligence and to form a new trade council.
At first glance, the reduction of tariffs on agricultural exports from the USA and small appliances from China is a huge success. But let’s be realistic and try to understand what is going on here. It is not reconciliation of superpowers, but a temporary solution for the continuation of the struggle between them.
Here’s the rub: trade policy in 2026 is not defined by blanket free trade deals. Hyper-globalization in which countries were stripping themselves of all protection, is dead. Governments have opted for a fragmented approach. By making exclusions in favor of consumer goods that do not carry any national security implications, negotiators will be able to give fast results to their disgruntled farmers in Iowa and price-sensitive consumers in California without compromising their strategic industries such as semiconductors, quantum computing, or defense industries.
Indeed, can one blame them? Washington is under tremendous domestic pressure to fight inflation. At the same time, Beijing wants to make sure its export machinery continues to work at full capacity despite other economic challenges. Prolonging a trade ceasefire by two more months (as pointed out by the US Treasury Secretary Scott Bessent, which gives them extra bargaining room before the initial deadline in November) shows how important predictability of operations is for both sides right now.
The reason why this new form of truce agreement is interesting is the involvement of artificial intelligence in the diplomatic discussions. However, there is no need to raise expectations too high: establishing bilateral discussions about risks and a communication channel for AI incidents is not regulation but only the first step of the diplomatic process intended to prevent misunderstandings related to the development of this technology.
It goes without saying that the critics immediately emphasize the fact that 30 billion dollars in tariffs is not even a small part of the huge volume of the US-China trade. This is true. The dispute about the technological transfer remains unresolved; the subsidies go on, and the geopolitical points of controversy, such as regional security issues, have not disappeared.
And so what does that mean for international business? The relief offered by selective truces for supply chain managers is a temporary release valve within a pressurized environment. However, for those who think it means that the market has returned to being an open forum, that assumption would be incorrect.
