U.S. President Donald Trump announced on Thursday that he had reached an agreement with Chinese President Xi Jinping to reduce tariffs on China in exchange for Beijing cracking down on the illegal fentanyl trade, resuming U.S. soybean purchases, and maintaining rare earths exports. The meeting between Trump and Xi in Busan, South Korea, marked the conclusion of Trump’s recent Asia tour, during which he also highlighted progress in trade discussions with South Korea, Japan, and Southeast Asian countries.
Trump expressed his satisfaction with the meeting, rating it as a “12 out of 10” and disclosed that tariffs on Chinese imports would be decreased from 57% to 47%. This reduction was primarily driven by the commitment of China to combat the flow of fentanyl, a dangerous synthetic opioid responsible for numerous overdose deaths in the U.S.
While Trump praised the tariff reduction, only India and Brazil remain subject to higher tariff rates among significant U.S. trading partners. Following the meeting, Xi emphasized further cooperation, and China’s Commerce Ministry announced a one-year suspension of some retaliatory measures.
The global stock markets had been optimistic about a potential breakthrough in the trade war between the U.S. and China, with record highs recorded prior to the meeting. However, concerns arose about the sustainability of the truce, given the history of promising beginnings followed by setbacks in previous trade negotiations.
Despite the positive talks, uncertainties remain regarding the longevity of the trade agreement as both countries engage in economic and geopolitical competition. Trump and Xi discussed their primary concerns while aiming to enhance China-U.S. relations during the two-hour meeting at the Asia-Pacific Economic Cooperation (APEC) summit.
In addition to reducing fentanyl tariffs, China sought a relaxation of export controls on sensitive U.S. technology and a rollback of new U.S. port fees targeting Chinese vessels. Trump mentioned that China would immediately increase its purchases of U.S. soybeans and other agricultural products.
China’s recent soybean purchases and the expiration of previous trade deals affecting rare earth magnets have intensified the trade discussions. Trump assured reporters that China would not impose controls on rare earths, an essential mineral in various industries.
Moreover, Trump signed agreements with Japan and Southeast Asian nations to diversify rare earth supplies during his trip. The leaders did not discuss Nvidia’s Blackwell artificial intelligence chip extensively, and U.S. Treasury Secretary Scott Bessent announced that China had committed to buying significant quantities of American soybeans in the coming years.
Overall, the meeting between Trump and Xi showcased progress in trade relations, but uncertainties persist about the durability of the agreements and the future of U.S.-China economic ties.
