U.S. President Donald Trump and Chinese leader Xi Jinping reached a crucial, if temporary, trade truce following an extensive one hour and 40 minute bilateral meeting on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in Busan.
In their first in-person meeting since 2019, the two leaders addressed several points of friction that had threatened to push the world’s two largest economies toward a full-blown trade war, securing concessions on tariffs, critical minerals, and agricultural trade.
President Trump described the encounter as “an amazing meeting” that produced “very important decisions,” rating it “12 out of 10.” The first official Chinese comments were less specific, noting that negotiating teams from both countries had reached a “consensus,” a likely reference to previous preparatory talks. The key outcomes focus on de-escalation, though a comprehensive deal remains elusive.
Here are some of the key takeaways from the Trump-Xi meeting:
Rolling back tariffs
A primary element of the truce is the immediate reduction of a key tariff. President Trump told reporters aboard Air Force One that he had agreed to cut the 20% tariff increase, imposed earlier over China’s role in producing fentanyl and the chemicals used to make it, to 10%.
China confirmed the move, stating that this reduction will take average tariffs on Chinese goods down to 47%, from 57%. In return, the two sides agreed to continue efforts to crack down on the illicit flow of the drug into the U.S. Other existing tariffs remain in place, though a broader truce on even steeper tariff increases has been extended.
China suspends export controls on rare earth minerals
The most critical aspect for defense and high-technology industries is China’s agreement to pause its new export controls on rare earths. These minerals are essential inputs for everything from military radars and cruise missiles to electric vehicle batteries and smartphones.
Trump announced that China had agreed not to tighten restrictions on exports of rare earths and the related processing technology, suspending its recently announced controls for one year. “That roadblock is gone now,” the President said, calling the rare earths agreement a one-year deal that he expects to be “very routinely extended as time goes by.” The U.S. had previously threatened 100% import taxes over China’s restrictions, which Beijing had used as leverage given its dominance of the global supply chain.
Agricultural and Energy Commitments
U.S. farmers are set to receive significant relief following Beijing’s commitment to resume large-scale purchases. President Trump said the Chinese side has committed to buying “a tremendous amount” of American soybeans, sorghum, and other farm products. U.S. Treasury Secretary Scott Bessent provided specifics, stating that China agreed to buy 12 million metric tons of U.S. soybeans in the current season and committed to purchasing 25 million tons annually over the next three years.
Trump celebrated the move in a post on Truth Social: “Farmers should immediately go out and buy more land and larger tractors. I would like to thank President Xi for this!”
On energy, Trump said officials would be meeting to see “if such an Energy Deal can be worked out” after China reportedly agreed to begin purchasing oil and gas from Alaska. The U.S. and China also agreed to suspend fees for one year on ships that dock at each other’s ports.
Technology and Future Governance Talks
The two leaders discussed U.S. sales of computer chips to China, a sector facing increasing restrictions. Trump stated that China will speak with Silicon Valley chipmaker Nvidia about purchasing their chips. He made a clear distinction, however, saying the discussions did not cover the company’s most advanced Blackwell AI chip. “We make great chips,” Trump told reporters, adding that he considers Nvidia “the leader” in the field.
Regarding the popular video-sharing platform TikTok, China’s Commerce Ministry stated that Beijing will “work with the U.S. to properly resolve issues related to TikTok,” though no details were given on progress toward a separation of its U.S. operations from Chinese company ByteDance.
Uneasy truce or breakthrough?
Chinese state media reported that President Xi emphasized the necessity of dialogue over confrontation, noting that the recent twists and turns in the relationship offer lessons for the U.S. and China. Xi urged both nations to “take the long-term perspective into account, focusing on the benefits of cooperation rather than falling into a vicious cycle of mutual retaliation.” He listed cooperation areas including illegal immigration, anti-money laundering, artificial intelligence, and infectious diseases.
Despite the temporary calm, the agreement is widely characterized as an “uneasy truce” rather than a full trade deal, according to analysts. Nicholas Burns, former U.S. ambassador to China during the Biden administration, cautioned that “Where we are is an uneasy truce in a long, still simmering trade war.” Other analysts noted that China successfully leveraged its dominance over rare earths and its soybean embargo to secure the tariff reduction.
Han Shen Lin, China director at advisory firm The Asia Group, described the meeting as more of a “tactical pause than a strategic breakthrough” to cool off tensions, adding that “A temporary truce is better than an uncontrolled trade war.”
Key Highlights from Trump and Xi meeting in South Korea
- Tariff Reduction: U.S. cuts tariffs on Chinese goods related to fentanyl precursor chemicals from 20% to 10%.
- Rare Earths Truce: China agrees to a one-year pause on the imposition of sweeping export controls on rare earth minerals.
- Agricultural Trade: China commits to buying a “tremendous amount” of U.S. farm products, including 25 million metric tons of soybeans annually over the next three years.
- Technology Talks: Discussion on U.S. sales of Nvidia chips to China, excluding the next-generation Blackwell AI chip.
- TikTok: China’s Commerce Ministry agrees to “work with the U.S. to properly resolve issues related to TikTok,” with no deal finalized.
- Future Engagements: President Trump plans to visit China in April while President Xi will visit the U.S. at a later date.