US President Donald Trump and Chinese President Xi Jinping have agreed to trim tariffs and maintain the flow of rare earth exports from China, marking a temporary easing of trade tensions between the two economic powers.
The understanding was reached during their meeting in Busan, South Korean — their first face-to-face talks since 2019 — at the conclusion of Trump’s Asia tour. According to Beijing’s commerce ministry, China will pause newly announced export controls on rare earth elements for one year. These minerals are critical for manufacturing electric vehicles, aircraft, electronics, and defense systems.
Trump said tariffs on Chinese imports would be reduced to 47 per cent from 57 per cent, partly by halving duties linked to trade in fentanyl precursor chemicals. He described the meeting with Xi as “amazing,” saying the Chinese leader had agreed to work to stop the flow of the deadly synthetic opioid into the US.
In return, Washington will delay for a year the implementation of new measures that would have barred thousands of Chinese companies from accessing US technology if they were part-owned by sanctioned entities. The US will also suspend for a year certain restrictions targeting China’s maritime logistics and shipbuilding sectors.
Global markets reacted cautiously to the development, with investors viewing the deal as a short-term reprieve in a broader, unresolved trade rivalry. Analysts said the agreement restores a measure of stability to global supply chains but does not fundamentally alter the competitive dynamic between the two countries.
Chinese state media portrayed the meeting as a diplomatic success for Beijing, emphasising Xi’s confidence in managing economic risks and sustaining growth. Trump, meanwhile, said he plans to visit China in April before hosting Xi in the United States later next year.
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