US President Donald Trump announced on Thursday that he and Chinese President Xi Jinping had agreed to reduce tariffs on Chinese imports from 57% to 47%, in exchange for Beijing taking action against the illicit fentanyl trade, resuming purchases of American soybeans, and pausing rare earth export curbs for a year.
Reuters reported Trump describing the face-to-face meeting in Busan, South Korea—their first since 2019—as "an amazing meeting," ranking the talks "12 out of 10."
He said the tariffs related to fentanyl precursor drugs had been halved to 10% because he believes China is “really taking strong action” to curb the deadly synthetic opioid, which is the leading cause of overdose deaths in the United States.
China’s commerce ministry confirmed the pause on rare earth export controls would last for a year, with both sides also reaching agreement on fentanyl cooperation and expanding agricultural trade. Trump added that China would immediately purchase "tremendous amounts" of US soybeans and other farm products.
Despite the high-profile summit, global stock markets responded cautiously. Major Asian indexes and European futures swung between gains and losses, while China’s Shanghai Composite Index slipped from a ten-year high, and US soybean futures weakened.
“The response from markets has been cautious in contrast to Trump’s enthusiastic characterisation of the meeting,” said Besa Deda, chief economist at William Buck in Sydney.
The talks took place on the sidelines of the Asia-Pacific Economic Cooperation summit and lasted more than 90 minutes. Trump highlighted previous agreements reached by US negotiators to avoid a full 100% tariff on Chinese goods and to defer China’s export restrictions on rare earths.
Xi, speaking through a translator, noted that “frictions now and then are normal” between superpowers and said that “China’s development and rejuvenation are not incompatible with President Trump’s goal of ‘Making America Great Again.’”
Trade issues beyond fentanyl were also discussed, with Beijing seeking an easing of US export controls on sensitive technology and a rollback of port fees imposed on Chinese vessels. Trump made no comment on US concessions.
On other topics, Trump said he did not discuss Nvidia’s Blackwell AI chip or the issue of Taiwan during the meeting. Minutes before meeting Xi, he ordered the US military to resume nuclear weapons testing for the first time in 33 years, citing the growing arsenals of Russia and China. China’s foreign ministry expressed hope that the US would adhere to the existing nuclear testing moratorium.
The White House has indicated that the Busan summit could mark the beginning of multiple meetings between the two leaders, with Trump planning a visit to China in April before hosting Xi in the United States. - October 30, 2025
