Expert Analyzes Implications of Trump-Xi’s $30 Billion Trade Agreement Ahead of Holiday Season

In a recent interview with FOX Business, CATO research fellow Clark Packard dissects the potential impact of the Trump-Xi trade agreement on consumers and the trajectory of U.S.-China relations.

Trade policy expert Clark Packard noted that consumers might experience modest price relief heading into the holiday season, following President Donald Trump and Chinese President Xi Jinping’s agreement to reduce tariffs on $30 billion in goods, including household items and toys.

“Consumers can likely anticipate some savings on household goods and toys as the holidays approach, but beyond that, I do not anticipate significant changes for the average American consumer,” Packard stated.

Packard explained that many items slated for tariff reductions are holiday gifts, specifically citing toys, dolls, puzzles, and household and kitchen wares.

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U.S. President Donald Trump greets Chinese President Xi Jinping during an arrival ceremony at Joint Base Andrews on Sept. 23, 2026. (Chip Somodevilla/Getty Images / Getty Images)

However, the extent of savings remains uncertain, as major retailers may respond with a combination of holiday discounts and profit-margin absorption, Packard noted.

Packard emphasized that the tariff reduction represents only a small fraction of the over $400 billion in U.S. imports from China last year. Estimates indicate the agreement lowers the overall U.S. tariff rate on Chinese imports from roughly 22% to 20.5%.

“Thirty billion dollars is a modest figure. There will be some limited impacts, though specific sectors like retail will benefit,” Packard said.

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Packard noted that shoppers could see modest savings on toys and kitchen wares. (David Paul Morris/Bloomberg via Getty Images/File / Getty Images)

Packard highlighted that high-tech items were excluded from the deal due to geopolitical and security concerns, including internet-connected auto parts, U.S. controls on advanced semiconductors, and Chinese control of rare-earth mineral supply chains.

“The U.S. is concerned about Chinese control over the rare-earth mineral supply chain, while China worries about U.S. control over the semiconductor supply chain,” Packard said. “I see little political willingness on either side to address the underlying causes of friction.”

The Trump-Xi deal will lower tariffs on $30 billion in non-sensitive goods. (iStock / iStock)

The agreement defers major decisions, reflecting short-term, incremental progress on lower-stakes items while leaving broader trade tensions unresolved.

“This deal essentially defers major issues to the new year,” Packard said. “My sense is that we will continue to address these issues in short bursts until there is willingness on both sides.”

“We are still far from any grand bargain,” Packard concluded.

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