What Trump and Xi agreed to in the U.S.-China trade truce
2025-10-30 17:23:56
president Donald Trump And the president Xi Jinping The United States reached a trade truce during a high-level meeting in South Korea on Thursday, calming a dispute over rare earth elements that threatened to push the world’s two largest economies into an all-out trade war.
China agreed to a one-year pause Comprehensive export controls On the rare earth announced on October 9 that sparked the dispute.
Trump told reporters aboard Air Force One that the rare earths agreement is a one-year deal that will be “routinely extended over time.” The president said he plans to visit China in April, and Xi will visit the United States, either Palm Beach, Florida, or Washington, D.C., at a later date.
“We have an agreement,” Trump said. “Now, we will renegotiate the deal every year, but I think the deal will last a long time, long after the year. But all the rare earths are settled, and this is for the sake of the world.”
Trump said he reduced tariffs effective immediately on China related to fentanyl to 10% from 20%. This reduces the overall rate for Chinese goods to about 47%, the president told reporters. Trump had previously threatened to impose 100% tariffs on China on November 1 over its controls on rare earth elements.
The United States will postpone the rule announced on September 29 requiring majority-owned subsidiaries of Chinese companies to be included in the Entity List, according to a statement from Chinese Ministry of Commerce. The United States and China also agreed to suspend duties for one year on ships calling at their respective ports.
Did China win?
Beijing surprised the White House by imposing strict controls on the export of rare earths before the meeting between Trump and Xi, exploiting its dominance of the global supply chain to gain influence over Washington.
The United States depends on China for rare earth elements, which are used to produce magnets that are key inputs in weapons platforms, semiconductor manufacturing, electric vehicles and other applications.
China has successfully used rare earth export controls and a soybean ban to force the United States to lower tariffs, Tobin Marcus, a strategist at Wolff Research, told clients in a note.
Chinese President Xi Jinping attends a meeting with US President Donald Trump (not pictured) alongside Chinese Vice Premier He Leveng, Politburo Standing Committee member Tsai Qi, Chinese Foreign Minister Wang Yi, Chairman of China’s National Development and Reform Commission Cheng Shanjie, and Chinese Minister of Commerce Wang Wentao at Gimhae International Airport, on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit, in Busan, South Korea, on October 30, 2025.
Evelyn Hochstein | Reuters
“Xi was prepared for Trump in his second term and has a powerful rare earth weapon,” Piper Sandler analysts led by Andy Laperriere told clients. “China is outperforming the United States in recent truce negotiations.”
Nicholas Burns, a former US ambassador to China during the Biden administration, warned that the truce reached between the US and China is not a comprehensive deal.
“What we are in now is an uneasy truce in a long trade war that is still raging,” Burns told CNBC.Squawk box” Thursday .
The truce is ambiguous in key areas
It is not entirely clear what China has agreed to in key areas such as agriculture, energy purchases from the United States and cooperation in combating fentanyl trafficking.
Trump said Beijing had agreed to buy large quantities of soybeans, sorghum and other agricultural products. China will buy 25 million metric tons of soybeans annually over the next three years, Treasury Secretary Scott Besent told Fox Business in an interview.
Harvested soybeans are transferred from a grain truck to a storage silo on a farm near Gregory, Arkansas, U.S., on Friday, October 24, 2025.
Rory Doyle | Bloomberg | Getty Images
But China’s Ministry of Commerce simply said the two sides agreed to expand agricultural trade, without providing details.
Beijing made promises about soybeans and fentanyl during Trump’s first term, said Laperriere, the Piper Sandler analyst. He added: “So it is doubtful that Trump got anything in return for lowering tariffs on China.”
Trump said China may buy a large amount of oil and gas from Alaska, but an agreement must still be reached. Trump said Energy Secretary Chris Wright and Interior Secretary Doug Burgum would meet with Chinese officials to see if such an agreement could be reached.
The president said he discussed exporting Nvidia Chips is with Xi and will speak with CEO Jensen Huang about the topic. But Trump said the discussions did not include Blackwell’s more advanced graphics processing units. He said it was up to China and Nvidia to reach an agreement.
“I said this is really between you and Nvidia, but we’re kind of the arbitrators,” Trump said on Air Force One.
China’s Ministry of Commerce said Beijing would work with the United States to “resolve issues related to TikTok,” though no further details were provided. Trump did not mention TikTok during his comments to reporters aboard Air Force One or in a post on Truth Social about the truce with China.
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