US President Donald Trump has hailed a deal with Chinese President Xi Jinping to cut tariffs and resolve a rare earth dispute. The agreement, reached during a meeting in Busan, South Korea, on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit, marks a significant breakthrough in US-China trade relations.
According to Trump, the deal includes a reduction in tariffs on Chinese imports from 57% to 47%, with a separate cut in “fentanyl tariffs” from 20% to 10%. This reduction is reportedly linked to Xi’s assurance that China will work to stop the flow of fentanyl, a synthetic opioid driving overdose deaths in the US. Trump described the meeting as “a great success” and praised Xi as a “tremendous leader of a very powerful country”.
A key aspect of the deal is a one-year extendable agreement on China’s supply of crucial rare earths, materials essential for sophisticated electronic components across various industries. China had announced additional controls on rare earth exports in early October, but the deal ensures these exports will continue to flow. Trump stated that the rare earth issue has been “settled” and “that will hopefully disappear from our vocabulary for a little while”.
The agreement also includes China immediately buying “tremendous amounts of soybeans and other farm products,” a key issue for Trump’s support in farm country and a point of leverage for Beijing. The leaders did not discuss the sensitive issue of Taiwan during their meeting, according to Trump.
Both leaders agreed to “work together” on the Ukraine issue, with Trump saying Xi is “going to help us” resolve the conflict. The deal is expected to stabilize supply chains, lower inflation, and boost economic growth. Trump plans to visit China in April, while Xi will make a reciprocal visit to the US later.
