U.S. President Donald Trump announced on Thursday that he had reached an agreement with President Xi Jinping to reduce tariffs on China in exchange for Beijing’s efforts to combat the illegal fentanyl trade, resume purchasing U.S. soybeans, and continue exporting rare earths. The discussions between Trump and Xi in Busan, South Korea, represented the conclusion of Trump’s rapid Asia tour, during which he highlighted trade advancements with South Korea, Japan, and Southeast Asian countries.
Trump expressed satisfaction with the meeting’s outcome, rating it as “12 out of 10” and revealing that tariffs on Chinese imports would be lowered from 57 percent to 47 percent. This reduction would involve halving the tariffs on fentanyl precursor drugs from 20 percent to 10 percent, as China committed to intensify efforts to combat the flow of fentanyl into the U.S., a substance linked to numerous overdose deaths.
While Trump welcomed the tariff adjustments, only India and Brazil continue to face higher tariff rates compared to other major U.S. trading partners. Xi emphasized the need for further collaboration, as reported by Chinese state media post-meeting. The potential trade resolution between the world’s top two economies generated optimism in global stock markets but triggered concerns about the sustainability of the truce amid past setbacks in trade negotiations.
The meeting, held on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit, lasted nearly two hours and saw China agreeing to pause certain countermeasures for a year. Both leaders acknowledged the normalcy of occasional frictions between superpowers and expressed commitment to addressing mutual concerns.
In addition to the tariff adjustments, Beijing pushed for relaxed export controls on sensitive U.S. technology and the reversal of new U.S. port fees targeting Chinese vessels. Trump did not immediately disclose U.S. concessions but mentioned China’s commitment to purchasing significant quantities of American soybeans and other agricultural products promptly.
Furthermore, Trump emphasized that China would not impose restrictions on rare earths, crucial minerals for various industries, following the recent expansion of China’s controls in this sector. Trump’s engagements during his trip included signing agreements with Japan and Southeast Asian nations to diversify rare earth supplies, aiming to reduce China’s dominance in this critical area.
Regarding the trade of soybeans, U.S. Treasury Secretary Scott Bessent revealed that China agreed to purchase 12 million metric tonnes of American soybeans for the current season through January and committed to buying 25 million tonnes annually for the next three years. Bessent also mentioned that other Southeast Asian countries agreed to purchase an additional 19 million tonnes of U.S. soybeans, although the timeframe for these transactions was not specified.