U.S. President Donald Trump announced that he and Chinese President Xi Jinping had reached an agreement to reduce tariffs on Chinese goods in exchange for China’s crackdown on the illicit fentanyl trade, resuming U.S. soybean purchases, and maintaining rare earths exports. The two leaders met in Busan, South Korea, marking the end of Trump’s Asia tour, during which he also highlighted progress in trade deals with South Korea, Japan, and Southeast Asian countries.
Following the meeting, Trump expressed satisfaction, rating the talks highly. He disclosed that tariffs on Chinese imports would be lowered to 47% from 57% by halving the tariffs on fentanyl precursor drugs. Trump emphasized China’s commitment to combatting the flow of fentanyl, a potent opioid responsible for numerous overdose deaths in the U.S.
While Trump praised the tariff reduction, only India and Brazil remain under higher tariff rates among major U.S. trading partners. Xi emphasized the need for further cooperation in a statement conveyed through Chinese state media. The global stock markets had surged before the meeting in anticipation of a potential breakthrough in the trade war between the U.S. and China, though concerns arose about the sustainability of the truce.
Both leaders engaged in discussions at the Asia-Pacific Economic Cooperation (APEC) summit, where China sought eased export controls on U.S. technology. Trump did not immediately comment on U.S. concessions but mentioned China’s commitment to purchasing significant amounts of U.S. soybeans and other agricultural products.
China recently purchased its first batch of U.S. soybeans in months, and previous trade agreements, which mitigated retaliatory tariffs and resumed rare earth magnet exports from China, are set to expire soon. Trump confirmed that China would not impose restrictions on rare earths, a critical mineral resource. During his trip, Trump signed agreements with Japan and Southeast Asian nations to diversify rare earth supplies, aiming to reduce China’s dominance in that sector.
Additionally, U.S. Treasury Secretary Scott Bessent revealed that China agreed to purchase 12 million metric tonnes of American soybeans for the current season and committed to buying 25 million tonnes annually for the next three years. Other Southeast Asian countries also agreed to buy 19 million tonnes of U.S. soybeans, as announced by Bessent on Fox Business Network.