Trump and Xi Seal One-Year Trade Pact as US Cuts China Tariffs to 47%
US President Donald Trump and Chinese President Xi Jinping concluded their highly anticipated meeting in Busan on October 30 with an agreement on a one-year trade pact designed to ease tensions between the world’s two largest economies.
The 100-minute meeting concluded with what both sides described as «major progress» toward restoring predictability to bilateral trade. Speaking to reporters aboard Air Force One, Trump said he had agreed to reduce tariffs on Chinese goods to 47%, in exchange for Beijing resuming large-scale purchases of US soybeans, maintaining the flow of rare earth exports, and intensifying efforts to curb the illegal fentanyl trade.
«I thought it was an amazing meeting,» Trump said. «We came to a conclusion on many important points, and we will be handing them to you in a little while.»
The announcement capped a whirlwind Asia tour in which Trump also touted trade breakthroughs with Japan, South Korea and several Southeast Asian nations.
Fentanyl and Rare Earths at the Core of Agreement
Washington’s decision to scale back tariffs came alongside a pledge by China to tighten oversight of fentanyl precursor chemicals, a key irritant in bilateral relations that had seen the US maintain 20% tariffs on Chinese imports.
Trump confirmed that the rare earths dispute had been settled, telling reporters there was now «no roadblock from China anymore.» Beijing, which dominates global processing of critical minerals, had recently restricted exports of rare earths used in advanced manufacturing and defence technologies.
«This was a worldwide situation, not just a US situation,» Trump said. «All of the rare earth issue is settled, and that’s for the world.»
Though the precise terms were not disclosed, the resolution could ease pressure on global manufacturers reliant on Chinese rare earths for electric vehicles, electronics and defence equipment.
Focus on AI Chips and New Cooperation
Technology exports also featured prominently. Trump confirmed that China will soon open discussions with Nvidia CEO Jensen Huang, with Washington acting as «a referee». He stressed that talks would not include Nvidia’s most advanced Blackwell AI chips, which are subject to strict US export controls.
The leaders also agreed to cooperate on addressing the war in Ukraine.
«We’re both going to work together,» Trump said. «Sometimes you gotta let them fight, but we’re going to work together on Ukraine.»
Taiwan Absent from Talks
Contrary to widespread speculation, Taiwan was not raised during the discussions. «It never came up,» Trump told reporters, adding that the meeting focused on trade, security and «stability in global markets».
The decision to sidestep Taiwan could signal an effort by both sides to keep the talks narrowly focused on areas where progress was achievable.
Nuclear Testing and Future Visits
Before the meeting, Trump authorised the resumption of US nuclear weapons testing, citing recent tests by Russia and China. He later defended the move as «appropriate», insisting it was necessary to maintain parity with other powers.
Despite renewed controversy over the decision, the Busan meeting ended on a conciliatory note. Trump announced plans to visit China in April 2026, with Xi expected to make a reciprocal visit to Washington later in the year.
Markets React Positively
Investor optimism was evident even before the meeting began. China’s Shanghai Composite Index hit a decade-high earlier in the day, buoyed by expectations of a de-escalation in trade tensions. Global markets also posted modest gains amid hopes of renewed stability between Washington and Beijing.
Frank Lavin, a former US undersecretary of commerce, described the talks as «an enormously helpful step» toward a more predictable relationship.
«Both leaders signalled with their opening statements that they want to take issues off the table and get relations back on an even keel,» he said.
