Trump Reduces Tariffs on China Following “Successful” Meeting with Xi in South Korea

President Donald Trump hailed his meeting with Chinese President Xi Jinping in South Korea as a major breakthrough, announcing that he would cut tariffs on China while Beijing had agreed to resume exports of rare earth elements and purchase American soybeans.

Speaking to reporters aboard Air Force One, Trump said the U.S. would lower tariffs imposed earlier this year as a penalty for China’s sale of chemicals used to produce fentanyl—from 20% to 10%. The move effectively reduces the total combined tariff rate on Chinese goods from 57% to 47%.

“I guess on the scale from 0 to 10, with ten being the best, I would say the meeting was a 12,” Trump said. “I think it was a 12.”

Trump added that he plans to visit China in April, with Xi expected to make a return visit to the United States “some time after that.” The two leaders also discussed the potential export of advanced computer chips to China, with Trump noting that Nvidia would begin talks with Chinese officials. The president further hinted that a trade agreement between the two countries could be signed “pretty soon.”

“We have not too many major stumbling blocks,” Trump remarked.

Lingering Tensions Despite Optimism

Despite the upbeat tone following their 100-minute meeting in Busan, analysts say significant tensions persist between the world’s two largest economies. The U.S. and China continue to compete for dominance in manufacturing, emerging technologies such as artificial intelligence, and influence in global affairs, including Russia’s war in Ukraine.

Trump’s tariff-heavy trade strategy since his return to the White House, coupled with China’s retaliatory restrictions on rare earth exports, underscored the urgency of this latest dialogue. Both leaders appeared to acknowledge the risks of escalating their trade war further, given the potential global economic fallout.

At the start of the meeting, Xi read prepared remarks emphasizing cooperation despite ongoing differences. “Given our different national conditions, we do not always see eye to eye with each other,” Xi said through a translator. “It is normal for the two leading economies of the world to have frictions now and then.”

However, China’s Xinhua News Agency translated the comment slightly differently, reporting Xi as saying that “having some differences is inevitable.” The Chinese government did not immediately issue an official statement on the meeting or its outcomes.

A Meeting Aimed at Reducing Friction

The talks took place in Busan, a port city roughly 76 kilometers (47 miles) south of Gyeongju, the main venue for this week’s Asia-Pacific Economic Cooperation (APEC) summit.

In the days preceding the meeting, U.S. officials signaled that Trump would not follow through on his recent threat to impose an additional 100% import tax on Chinese goods. China, meanwhile, appeared prepared to ease export limits on rare earth materials and purchase American soybeans as part of confidence-building efforts.

Diplomatic groundwork for the meeting had been laid earlier in the week in Kuala Lumpur, where negotiators from both sides met. Afterward, China’s top trade envoy Li Chenggang said the talks had achieved a “preliminary consensus,” a sentiment echoed by U.S. Treasury Secretary Scott Bessent, who described the outcome as “a very successful framework.”

Just before the Thursday meeting, Trump took to Truth Social, calling the encounter the “G2” — a nod to the U.S. and China’s status as the world’s two biggest economies. Unlike the G7 or G20 summits often held in luxury settings, the Trump–Xi meeting took place in a small gray building with a blue roof on a military base next to Busan’s international airport.

News of the apparent thaw between Washington and Beijing sparked optimism among investors and businesses, many of whom have been caught in the middle of the prolonged trade conflict. U.S. markets climbed on renewed hopes of a potential trade framework emerging from the meeting.

Pressure Points Still Shape the Relationship

Although Trump projected confidence that the “grounds for a deal” were in place, experts warned that past negotiations with China have often followed a pattern of temporary breakthroughs followed by renewed tension.

“The proposed deal on the table fits the pattern we’ve seen all year: short-term stabilization dressed up as strategic progress,” said Craig Singleton, senior director of the China Program at the Foundation for Defense of Democracies. “Both sides are managing volatility, calibrating just enough cooperation to avert crisis while the deeper rivalry endures.”

Trump’s primary leverage remains his tariff policy. Earlier this year, China faced new tariffs totaling 30%, including a 20% penalty tied to fentanyl-related chemical sales. The tariff rates have fluctuated dramatically — in April, Trump threatened to raise them to 145%, only to retreat amid negative market reactions. On October 10, he again threatened a 100% import tax over China’s rare earth restrictions.

That figure, including earlier tariffs, has now been adjusted to 47% “effective immediately,” Trump confirmed Thursday.

Xi, for his part, wields significant influence through China’s control of rare earth production and processing, materials vital for manufacturing fighter jets, robots, electric vehicles, and other high-tech products. China had tightened its export restrictions on October 9, continuing a cycle of escalation followed by conciliation.

Following the talks, Trump announced plans to return to Washington, while Xi is expected to remain in South Korea to meet regional leaders during the APEC summit, which officially begins on Friday.

“Xi sees an opportunity to position China as a reliable partner and bolster bilateral and multilateral relations with countries frustrated by the US administration’s tariff policy,” said Jay Truesdale, CEO of TD International and a former U.S. State Department official.

The high-stakes meeting in Busan appears to have bought both sides a measure of relief — but as history has shown, any détente between Washington and Beijing may prove temporary. 

By fLEXI tEAM