Trump, Xi Strike Tariff and Fentanyl Deal

BUSAN, South Korea (Reuters) — U.S. President Donald Trump said Thursday he reached a major trade agreement with Chinese President Xi Jinping, trimming tariffs on Chinese imports in exchange for Beijing’s crackdown on fentanyl trafficking, renewed U.S. soybean purchases, and the continued flow of rare earth exports.

The face-to-face meeting in the South Korean city of Busan marked the first Trump-Xi talks since 2019 and capped Trump’s whirlwind Asia trip, where he also secured trade deals with South Korea, Japan, and several Southeast Asian nations.

Under the new arrangement, U.S. tariffs on Chinese goods will drop from 57% to 47%, with fentanyl-related import duties cut in half. Trump said Xi pledged to “work very hard” to stem the deadly fentanyl trade, which has fueled record overdose deaths in the U.S.

China, in return, agreed to:

• Pause export controls on rare earth elements for one year;

• Buy 12 million metric tons of U.S. soybeans by January and 25 million tons annually for the next three years;

• Approve a deal for U.S.-controlled ownership of TikTok; and

• Resume purchases of U.S. oil and gas, including interest in a $44-billion LNG project in Alaska.

The U.S. will also suspend new restrictions on Chinese companies’ access to U.S. technology for one year — a key concession from Washington.

“It was an amazing meeting — a 12 out of 10,” Trump said aboard Air Force One.

Analysts called the deal a temporary truce, warning that it does little to fix structural tensions between the world’s two biggest economies.

“It’s transactional relief — not a reset,” said Craig Singleton of the Foundation for Defense of Democracies.

Global markets reacted cautiously, showing little movement after surging earlier in the week on hopes of a breakthrough.

During the meeting, Xi told Trump it was “normal for the two sides to have frictions now and then,” adding that China’s development “is not incompatible” with Trump’s “Make America Great Again” agenda.

The talks did not cover Taiwan or Nvidia’s Blackwell AI chips, issues that have previously sparked tension.

China’s state media hailed the meeting as a win for “stability and mutual respect,” while critics in Washington accused Trump of being too soft on Beijing.