U.S. President Donald Trump announced an agreement with President Xi Jinping to reduce tariffs on Chinese imports in exchange for China’s crackdown on the illicit fentanyl trade, resumption of U.S. soybean purchases, and continuous rare earths exports. This deal was finalized during their face-to-face meeting in Busan, South Korea, marking the end of Trump’s recent Asia tour.
Trump expressed satisfaction with the meeting, rating it as exceptional. The agreement includes lowering tariffs on Chinese imports from 57% to 47% by halving the tariff rate on fentanyl precursor drugs from 20% to 10%. Trump emphasized Xi’s commitment to combat the flow of fentanyl, a dangerous synthetic opioid responsible for numerous overdose deaths in the U.S.
Although Trump praised the tariff reduction, only India and Brazil remain subject to higher tariff rates among significant U.S. trading partners. Xi emphasized the need for continued cooperation, with China’s Commerce Ministry announcing a one-year pause on certain countermeasures.
The meeting, held on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit, lasted nearly two hours. Both leaders expressed optimism about addressing primary concerns and strengthening China-U.S. relations. Trump highlighted China’s commitment to purchasing substantial quantities of U.S. soybeans and other agricultural products immediately.
Additionally, Beijing sought relaxation of U.S. export controls on sensitive technology and a rollback of new U.S. port fees impacting Chinese vessels. Trump did not provide immediate details about U.S. concessions but confirmed China’s commitment to buying American soybeans.
Prior trade agreements, which reduced retaliatory tariffs and restored rare earth magnet supplies from China, are set to expire soon. Trump assured that China would not impose controls on rare earths. The leaders did not discuss Nvidia’s advanced Blackwell artificial intelligence chip during the meeting.
Furthermore, U.S. Treasury Secretary Scott Bessent disclosed that China agreed to purchase 12 million metric tonnes of American soybeans by January and committed to buying 25 million tonnes annually for the next three years. Other Southeast Asian countries also agreed to purchase an additional 19 million tonnes of U.S. soybeans.
In conclusion, the trade agreement between the U.S. and China signifies a significant step towards resolving trade tensions and fostering economic cooperation between the two nations.
