In our Tariff Tracker Update for 29 October 2026:
- U.S. and China reach agreement to reduce tariffs on $60 billion (€53.6 billion) worth of goods
- E.U. and China agree to reduce Chinese hybrid vehicle imports amid rising trade tensions
- Russia releases diesel supplies to U.S. and global markets after U.S. waives sanctions threat
- China proposes export controls on drone, artificial intelligence, medical, and solar energy technologies
The U.S. and China held a state visit from September 23–25 and announced a new agreement to reduce tariffs on $60 billion (€53.6 billion) worth of goods. The affected products include American livestock and agricultural products, certain wood products, and dental equipment. They also include a range of Chinese consumer goods including small kitchen appliances, home linens, cosmetics, and toys. Tariffs on these goods will be lowered to most-favored-nation tariff levels. The two countries also extended the deadline for temporary tariff reductions until January 10, 2027.
Officials have indicated that a broader agreement to reduce tariffs across the board is unlikely. They suggested that future summits may produce similar limited, product-specific agreements rather than a comprehensive trade deal. No further details have emerged from the summit regarding an agreement on rare earths.
Additionally, no further extension was announced of the U.S. proposal to enact fees on Chinese owned or operated vessels calling at U.S. ports. This was previously suspended for one year but could come into effect after the extension expires on November 9. Separately, Chinese officials also pledged not to intervene on Iran’s behalf in the ongoing U.S.-Iran War.
U.S. lifts 50% tariffs on certain goods from Canada
On October 23, the Trump administration announced that it would lift its 50% tariffs on some Canadian goods. These include plywood sheets, some paper products, and certain machinery and refrigeration equipment.
However, 50% tariffs will instead be added to other Canadian goods. Such goods include valves, carpets, cocoa powder, vinyl flooring, shampoo, and canoes. The tariff reduction will take effect from October 30.
These limited tariff reductions on strategic goods are intended to ease negative business impacts of the trade war in U.S. states along the Canadian border, including Maine and Michigan.
Meanwhile, discussions between the U.S. and Canada to ease tensions over steel and auto tariffs are reportedly progressing. Some expect an agreement in the week to come.
E.U. and China reach hybrid car import agreement amid E.U. proposal to expand trade powers
The E.U. is considering broader trade measures against China. This is amid concerns about the growing E.U. trade deficit and alleged undervaluation of the Chinese currency. Some E.U. legislators have called for a new policy instrument that would immediately suspend a country’s access to the E.U. market or enable broad tariffs if a foreign power attacked an E.U. member state’s economy.
The Chinese government has warned that it would retaliate if the E.U. pursued such measures. Beijing perceives this as the E.U. planning to target China using these new trade instruments.
Both sides reached a breakthrough during an E.U. trade visit to China on October 8-9. The E.U. and China agreed to limit Chinese exports of plug-in hybrid vehicles to the E.U. to 350,000 annually. Under the agreement, which will come into effect as soon as December 1, the vehicle export cap will increase by 6% per year. The agreement will remain in place for at least four years. Chinese cars assembled within the EU will not be subject to the quota. However, the threshold will apply to European companies that manufacture cars in China.
While the agreement resolves a recent irritant over these plug-in hybrid vehicle imports, the E.U. continues to consider expanding its trade powers through the proposed trade instrument. A full proposal is expected by the end of 2026, with debate anticipated in 2027.
The E.U. is also expected to propose new import caps on additional Chinese goods. These include chemicals, plastics, ferro-alloys, mechanical engineering products, and pharmaceuticals, which could prove harder to negotiate with China.
Additionally, the European Commission has discussed creating an instrument to prevent companies from relying on a single source for critical supplies. No further details have been specified about how the policy would accomplish this. E.U. lawmakers are expected to discuss these policies at an upcoming trade summit in December.
U.S. and Russia reach deal to release Russian diesel supplies and waive U.S. sanctions
On October 10, U.S. President Donald Trump and Russian President Vladimir Putin announced an agreement under which Russia will ease restrictions on diesel exports. Russia will supply approximately 2.2 million barrels of diesel fuel to the U.S. and global markets over the coming months.
The first 500,000 barrels have been authorized for release to global markets. Additional volumes are expected, although the timeline for further exports remains unclear.
The U.S. Office of Foreign Assets Control (OFAC) issued a temporary sanctions waiver to facilitate Russian fuel imports. However, the legality of the measure remains uncertain. A 2022 law prohibits Russian fuel imports until Russia ends its invasion of Ukraine.
In exchange, President Trump waived a recent law enacting 100% U.S. sanctions targeting buyers of Russian oil and 500% tariffs on Russian energy products. The waiver remains in effect until the administration determines that further action is appropriate. This leaves open the possibility that the tariff measures could still be implemented later.
China proposes new export controls on drone components and technology products
Beginning November 18, China will impose export restrictions on additional drone components, as well as certain types of industrial machinery, including dredgers and boring machines. Affected drone components include high-performance brushless motors, autonomous navigation technology, and obstacle avoidance technology.
The measures will increase scrutiny of products suspected of having potential dual-use applications. It will require exporters to provide end-user information to evaluate military relevance.
Separately, China has proposed expanding its dual-use export controls to cover several types of technology products. These are related to artificial intelligence, medical therapy, and solar energy.
Affected products include AI models and chip designs, biotechnology products associated with pathogenic microorganisms, cell and gene therapy, and oligonucleic acid drugs. Additional products include 12 solar energy-related technologies used in polysilicon, wafer, and solar cell manufacturing.
The period for public consultation on the proposal will end on November 15. After this, further details on the proposed restrictions may become available.
Everstream clients are receiving more detailed insights and recommendations about this risk.
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