This study employs national Computable General Equilibrium (CGE) model to simulate the impacts of reducing domestic agricultural trade costs on agricultural production, household income, food prices, macroeconomic conditions, as well as food consumption and dietary quality of urban and rural residents. We find that in comparison to trade costs associated with agricultural imports and exports, the reduction of domestic agricultural trade costs is more conducive to expanding food production and cultivation areas, reducing food prices, and improving the dietary conditions of both urban and rural residents in China. Moreover, it stimulates the growth of agricultural, agro-processing, and agrifood system GDP. In terms of specific foods, the reduction in domestic agricultural product trade costs will lower the prices of various food items, decrease the consumption of rice and wheat, and increase the consumption of other types of food. This study provides theoretical and empirical foundations for achieving the dual objectives of revitalizing the national unified market and promoting the transformation of the agrifood system to enhance nutritional welfare within the framework of the new development paradigm, thereby Copyright 2024 by Xiaolu Liu, Yumei Zhang, Xiangmin Lan, and Wei Si. All rights reserved. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies. offering valuable insights for informing governmental trade policy decisions. In the future, efforts should focus on intensifying the construction of infrastructure for perishable fresh agricultural products, reducing transportation distances, lowering transport costs, and establishing a "unified national market" in the agricultural sector to enhance the sustainability and resilience of China's agrifood system.