U.S. President Donald Trump announced an agreement with Chinese President Xi Jinping to reduce tariffs on China in exchange for Beijing’s crackdown on the illicit fentanyl trade, resuming U.S. soybean purchases, and maintaining exports of rare earths. The meeting between Trump and Xi in Busan, South Korea, marked the conclusion of Trump’s Asia tour, during which he highlighted trade breakthroughs with South Korea, Japan, and Southeast Asian countries.
Trump described the meeting as “amazing,” giving it a high rating of “12 out of 10.” He disclosed that tariffs on Chinese imports would be decreased to 47% from 57% by halving the fentanyl precursor drug-related tariffs to 10% from 20%. Trump emphasized Xi’s commitment to halting the fentanyl flow, a lethal synthetic opioid responsible for a significant number of American overdose deaths.
While Trump praised the tariff reduction, India and Brazil are the only major U.S. trading partners still subject to higher tariff rates. Xi emphasized further cooperation in remarks reported by Chinese state media post-meeting, with China’s Commerce Ministry announcing a one-year suspension of some countermeasures.
The global stock markets had reached record highs in anticipation of a resolution to the trade war between the two largest economies, but concerns arose about the sustainability of the truce, as previous negotiations have experienced setbacks following promising beginnings.
Xi and Trump engaged in talks at a South Korean airbase, with Xi acknowledging the normalcy of occasional frictions between superpowers. Both leaders expressed optimism, with Xi stating a willingness to work with Trump to strengthen China-U.S. relations.
In addition to reducing fentanyl tariffs, Beijing aimed to ease export controls on sensitive U.S. technology and reverse new U.S. port fees on Chinese vessels. Trump mentioned China’s commitment to purchasing substantial quantities of U.S. soybeans and other agricultural products promptly.
Before the summit, China made its first soybean purchases from the U.S. in several months. Previous trade agreements, which led to a reduction in U.S. retaliatory tariffs and the resumption of rare earth magnets’ flow from China, are set to expire soon. Trump assured reporters that China would not impose controls on rare earths.
During his trip, Trump signed agreements with Japan and Southeast Asian nations to diversify rare earth supplies, although diminishing China’s dominance in this sector may require considerable time. The leaders did not discuss Nvidia’s Blackwell artificial intelligence chip, and U.S. Treasury Secretary Scott Bessent disclosed China’s commitment to purchasing American soybeans in large quantities over the next few years.
The agreements reached at the meeting offer a glimpse of potential progress in the ongoing trade negotiations between the U.S. and China.