Trump and Xi Ease Tension With Truce on Tariffs, Rare Earths
Beijing Will Resume Purchases of US Soybeans
Key Takeaways:
- President Donald Trump and Chinese President Xi Jinping agreed Oct. 30 to extend a tariff truce, roll back export controls and reduce other trade barriers in a landmark summit.
- The deal pauses China’s rare-earth restrictions, cuts U.S. fentanyl tariffs to 10% and resumes Chinese purchases of U.S. soybeans, aiming to ease months of trade tensions.
- Both sides plan follow-up talks and working groups to finalize details, with Trump set to visit China in April as the nations seek to stabilize relations.
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Donald Trump and Xi Jinping agreed to extend a tariff truce, roll back export controls and reduce other trade barriers in a landmark summit on Oct. 30, potentially stabilizing relations between the world’s biggest economies after months of turmoil.
In the first sitdown between the leaders since Trump’s return to the White House, the pair agreed China would pause sweeping controls on rare-earth magnets in exchange for what Beijing said was a U.S. agreement to roll back an expansion of restrictions on Chinese companies. The U.S. will also halve fentanyl-related tariffs on Chinese goods, while Beijing resumes purchases of soybeans and other American agricultural products.
The U.S. is also extending a pause on some of its so-calledreciprocal tariffson China “for an additional year,” the Commerce Ministry in Beijing said in a statement, adding that China “will properly resolve issues related to TikTok with the U.S. side.” Trump said he would visit China next April, with Xi planning to head to the U.S. afterward.
“I guess, on the scale from zero to 10, with 10 being the best, I would say the meeting was at a 12,” Trump told reporters on Air Force One, which he boarded immediately after the meeting with Xi in Busan, South Korea. “You know, just the whole relationship is very, very important. I think it was very good.”
President Donald J. Trump and President Xi Jinping meet in South Korea. — The White House (@WhiteHouse)
Treasury Secretary Scott Bessent said the agreement was finished “in the middle of the night” before the leaders met. “I expect that we will exchange signatures, possibly as soon as next week,” he said of the deal, speaking on Fox Business.
Xi emphasized that dialogue is better than confrontation, calling for more communication between the two sides and cooperation in areas such as trade, energy and artificial intelligence, according to the official Xinhua News Agency.
“Both teams should refine and finalize follow-up work as soon as possible, maintain and implement the consensus, and provide tangible results to reassure the economies of China, the US and the world,” Xinhua cited Xi as saying.
U.S. stock futures were little changed as the New York trading day began, while China’s CSI 300 Index closed down 0.8%.
The outcome is poised to resolve — at least for now — months of trade brinkmanship in which the U.S. and China threatened a series of levies and export controls on their products that had the potential to disrupt global supply chains and hurt the world economy. Still, it falls short of a comprehensive agreement that addresses issues at the heart of the U.S.-China economic competition.
Nvidia Chips
Despite speculation that Trump might make additional concessions — including the U.S. opening access to Nvidia Corp.’s most advanced Blackwell line or changing its policy toward Taiwan — the president indicated that those issues hadn’t been part of the discussions. Trump and Xi did discuss access to some of the chipmaker’s other products, however, with the U.S. president saying he planned to speak with Nvidia CEO Jensen Huang.
The rollback of the fentanyl tariff from 20% to 10% represents a significant victory for Beijing, which should now find its exports more competitive compared with rivals that have enjoyed relatively lower levies. Trump also will not push ahead with a threatened 100% increase in tariffs he had threatened ahead of the talks to impose starting next month.
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Trump expressed optimism that the Chinese would ramp up investments in the U.S. and consider additional extensions delaying implementation of their rare-earth policy.
“It’s a one-year deal that will, I think, be very routinely extended,” Trump said.
Beijing has used the rare-earth restrictions as a cudgel in the trade talks, threatening to restrict access for U.S. and allied manufacturers to critical minerals necessary for high-tech manufacturing of smartphones, jet engines and other widely used products. Officials in China view the nation’s control over processed rare earths in the same way the U.S. sees its lock on the most-advanced Nvidia chips.
Trump also said Xi would take concrete steps to reduce the flow of precursor chemicals used to create fentanyl.
“I believe he’s going to work very hard to stop the death that’s coming in,” Trump said.
Bessent said that working groups would be set up in coming weeks to “set very objective measures on whether that’s successful or not.”
U.S. Trade Representative Jamieson Greer, speaking alongside Trump, said the U.S. would “postpone” action under Section 301 related to shipping and ports. Earlier this year, the U.S. announced port service fees on Chinese-owned vessels, with the Chinese retaliating later in the year. China also said it would suspend countermeasures against the U.S. for one year related to shipping.
“So that’s no longer an issue,” Trump said.
🚨 BREAKING: Trump secures agreement from China to buy 25M tons of US soybeans annually, 12M tons immediately, Bessent says — Fox News (@FoxNews)
On the resumption of soybean purchases — a political victory that should benefit farmers in his rural base — Trump said “tremendous amounts of the soybeans and other farm products are going to be purchased.”
Bessent later detailed that China will buy 12 million metric tons of soybeans during the current season, and a minimum of 25 million metric tons a year for the next three years. As for China’s approval of the sale of the U.S. operations of ByteDance Ltd.’s social video app TikTok, Bessent said on Fox Business, “I would expect that that would go forward in the coming weeks and months.”
The U.S. Treasury chief confirmed China’s earlier statement that Washington had agreed to roll back a rule that exposes subsidiaries that are at least 50%-owned by blacklisted firms to the same curbs as their sanctioned parent. The regulations have placed due diligence burdens on exporters.
Trump did say the leaders also agreed to work together on Ukraine, but indicated that Beijing had not agreed to his call for countries to cease oil purchases from Russia that helped to bankroll the country’s war effort.
Energy Purchases
“We didn’t really discuss the oil,” Trump said. “We discussed working together to see if we could get that war finished.”
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Trump added later in a post on Truth Social that officials from the U.S. and China would meet to discuss energy cooperation.
“China also agreed that they will begin the process of purchasing American Energy,” Trump said in the post. “In fact, a very large scale transaction may take place concerning the purchase of Oil and Gas from the Great State of Alaska.”
Ahead of the meeting at an air base in Busan, South Korea, on the sidelines of the Asia-Pacific Economic Cooperation summit, both leaders expressed optimism about repairing their economic ties.
“We do not always see eye-to-eye with each other, and it is normal for the two leading economies of the world to have frictions now and then,” Xi said. He added that the two “should stay the right course and ensure the steady sailing forward of the giant ship of China-U.S. relations.”
