Trump’s “Board of Trade” Plan Shows U.S. Has Abandoned Efforts to Reform China’s Economy

President Trump’s upcoming summit with Xi Jinping in Beijing is set to unveil a new trade strategy that bluntly acknowledges a bitter truth: the United States has given up on forcing China to change its economic system. Sources close to the talks reveal the U.S. is pushing a “Board of Trade” mechanism designed to manage trade flows by deciding which products can be exchanged even amid tense relations — while keeping sensitive goods like advanced U.S. chips off-limits.

This shift marks a profound break from the longstanding U.S. goal of pressuring China to open its markets and reduce its reliance on state subsidies and an undervalued currency. After decades of failed attempts to nudge China toward a more market-driven economy, the Trump administration is embracing pragmatism over ideology. In effect, Washington is conceding that China’s state-dominated model is here to stay and that the U.S. must now work within this reality.

“This is a realistic approach,” says Wendy Cutler, a former U.S. trade negotiator. “It’s futile to come up with rules to reset the relationship and open these markets.” But critics warn this signals a broader retreat from the U.S.’s historic role in championing a liberal global trade order. “It looks like China has won the long game,” says Jörg Wuttke, former head of the European Chamber of Commerce in China. “We have become more like them.”

The “Board of Trade” would see U.S. and Chinese officials coordinate tariffs, lowering them on approved products while keeping high or raising tariffs on others — creating a deliberate “tariff canyon.” This managed trade approach echoes past U.S. efforts in the 1990s to contain Japan’s economic rise, which ultimately faltered amid international pushback and domestic opposition.

The timing is no accident. With midterm elections looming, Trump seeks stability to avoid economic shocks from the ongoing trade war, which has seen tariffs on Chinese goods spike to nearly 148 percent at one point. For China, this framework would allow uninterrupted development of advanced technology and continued export dominance.

Business groups remain wary. The U.S.-China Business Council warns that managed trade could stifle competitiveness and fuel inflation, while details of the proposal remain murky. The Chinese side has downplayed the plan, referring to it as “working mechanisms” rather than a formal board.

If finalized, the Board of Trade will mark a stark admission that decades of U.S. pressure and tariffs failed to reshape China’s economy. Instead, the U.S. is settling for a fragile détente — trading away its ideals for a fragile stability that may favor Beijing’s vision of global economic order.