Beijing200 Boeing jets with GE engines anchor China’s summit commitments.
A new trade council will negotiate tariff cuts on products “of equal scale” on each side.
The Peterson Institute puts US tariffs at 47.5%, up 26.8 points since January 2025; the council must specify which products qualify.
Sources: TRT World
WHY BOEING IS THE BARGAINING CHIP
Boeing and Airbus are a global duopoly in wide-body commercial aircraft. China's COMAC C919 exists but depends on Western engines and avionics. Every Chinese airline expansion forces a binary choice between Seattle and Toulouse — which is why aircraft orders are the single most reliable signal Beijing can send Washington.
THE GE ENGINE LOCK-IN
The C919 — China's domestic narrowbody — uses CFM LEAP engines, a joint venture of GE and Safran. Beijing has spent two decades trying to build an indigenous turbofan; the CJ-1000A is still not certified. Until it is, every Chinese commercial jet flies because Washington and Paris allow it to.
HOW TARIFFS COMPOUND
A tariff is paid by the importer at the border, not the exporter. When the US raises tariffs on Chinese goods, US importers pay; they pass costs to consumers or eat margin. China retaliates by tariffing US exports, hurting US producers. Both sides bleed — the negotiation is over whose pain threshold breaks first.
THE SMOOT-HAWLEY GHOST
In 1930, the US passed the Smoot-Hawley Tariff Act, raising duties on 20,000 imports. Sixty countries retaliated; global trade collapsed by two-thirds over three years. Every postwar trade architect — Bretton Woods, GATT, WTO — built guardrails specifically to prevent that escalation spiral. The current US average tariff at 47.5% on Chinese goods is the highest since Smoot-Hawley.
WHY 'EQUAL SCALE' MATTERS
Trade balances are asymmetric: China exports roughly $500bn/year to the US, the US exports roughly $150bn/year to China. A tariff-for-tariff swap on equal dollar value is impossible because China runs out of US goods to tariff first. 'Equal scale' is diplomatic language for negotiating around that asymmetry.
THE TRADE COUNCIL PRECEDENT
Bilateral trade councils outside the WTO framework are a 1980s pattern — the US-Japan Structural Impediments Initiative (1989) was the template, negotiating specific sectors rather than universal tariff rules. They produce faster results than multilateral talks but bind only the two parties, fragmenting global trade norms.