Trump Cuts Tariffs On China After Meeting Xi In South Korea

ABOARD AIR FORCE ONE (AP) — President Donald Trump called his face-to-face meeting with Chinese leader Xi Jinping on Thursday a major success and said he would lower tariffs on China, while Beijing agreed to allow exports of rare earths and begin buying American soybeans.

The president told reporters aboard Air Force One that the United States will reduce tariffs imposed earlier this year on China from 20% to 10% as punishment for selling chemicals used to make fentanyl. This reduced the total combined tariff rate on China from 57% to 47%

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

Trump said he would go to China in April and Xi would come to the United States “sometime later.” The president also said they discussed exporting more advanced computer chips to China and that Nvidia would hold talks with Chinese officials.

Trump said a trade deal could be signed with China “very soon.”

Xi said Washington and Beijing would work to finalize their agreement to provide “domestic peace” to both countries and the rest of the world, according to a report of the meeting distributed by state media.

“Both sides should consider the long-term perspective by focusing on the benefits of cooperation rather than falling into a vicious cycle of mutual retaliation,” he said.

Despite Trump’s optimism after his 100-minute meeting with Xi in South Korea, the potential for major tensions remains between the world’s two largest economies. Both countries are seeking dominant positions in manufacturing, developing new technologies such as artificial intelligence, and shaping world affairs such as Russia’s war in Ukraine.

Trump’s aggressive use of tariffs since returning to the White House for a second term, coupled with China’s retaliatory restrictions export of rare earth elementsIt gave the meeting a newfound urgency. There is a mutual recognition that neither side wants to risk blowing up the world economy, which would jeopardize their own country’s fortunes.

As the two sat at the beginning of the meeting, Xi read prepared statements emphasizing his willingness to work together despite differences.

“Given our different national circumstances, we do not always agree with each other,” he said through a translator. “It is normal for the world’s two leading economies to experience friction from time to time.”

There was a slight difference in translation, as China’s Xinhua News Agency reported that Xi told Trump that some differences were inevitable.

The leaders met in Busan, South Korea, a port city about 76 kilometers (47 miles) south of Gyeongju, the conference’s main venue. Asia-Pacific Economic Cooperation peak.

In the days leading up to the meeting, US officials signaled that Trump had no intention of moving forward on the issue. last threat He decided to impose a 100 percent additional import duty on Chinese goods, and China has shown signs that it is willing to relax the tariff. Export controls on rare earth elements and also buy Soybeans from America.

Officials from both countries met in Kuala Lumpur earlier this week to prepare the ground for their leaders. Later, China’s chief trade negotiator, Li Chenggang, said they had reached a “preliminary consensus”. This statement was also confirmed by US Treasury Secretary Scott Bessent: ” a very successful framework.”

Shortly before Thursday’s meeting, Trump announced on Truth Social that the meeting would be “G2,” a recognition of the status of America and China as the world’s largest economies. The Group of Seven and the Group of 20 are other forums of industrialized nations.

But while these summits usually take place in luxurious venues, this meeting took place in a more modest setting: Trump and Xi met in a small gray building with a blue roof, located on a military base adjacent to Busan’s international airport.

The expected détente gave a sense of relief to investors and businesses caught between the two countries. USA exchange Hopes have increased that a trade framework will emerge from the meeting.

Trump ostensibly believes there is room for a deal, but previous talks with China this year in Geneva, Switzerland and London were a start-stop for them. The initial promise of progress has repeatedly led both countries to seek a better position vis-à-vis the other.

“The offer on the table fits the pattern we’ve seen all year: short-term stability disguised as strategic progress,” said Craig Singleton, senior director of the China program at the Foundation for Defense of Democracies. “Both sides are managing the volatility and arranging sufficient cooperation to avert crisis while deeper competition continues.”

The United States and China have shown that they believe they have the leverage to pressure each other, and the past year has shown that tentative steps forward can be short-lived.

For Trump, this pressure comes from tariffs.

China faces new tariffs totaling 30% this year, 20% of which are tied to its role in fentanyl production. However, tariff rates varied. In April, it announced that it planned to increase the rate on Chinese goods to 145%, but would abandon those plans as markets declined.

Then on October 10, Trump threatened a 100% import tariff due to China’s rare earth restrictions. That figure, including past tariffs, is now 47% “effective immediately,” Trump told reporters Thursday.

Xi has his stake in the world economy because China is the largest producer and processor of rare earth minerals needed to make fighter jets, robots, electric vehicles and other high-tech products.

China tightened export restrictions on October 9; This repeated a cycle in which each country jockeyed for supremacy but backed down after further trade talks.

What matters is what happens immediately after their meeting. While Trump plans to return to Washington, Xi plans to stay in South Korea to meet with regional leaders during the Asia-Pacific Economic Cooperation summit, which officially begins Friday.

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

Ken Moritsugu in Beijing and Seung Min Kim and Michelle Price in Washington contributed to this report. Boak reported from Tokyo and Megerian reported from Busan, South Korea.