US President Donald Trump and Chinese President Xi Jinping agreed to reduce tariffs on Chinese imports following a series of talks in Busan, South Korea. As part of the deal, China will take stronger action to combat the illegal fentanyl trade, resume purchasing US soybeans, and continue exporting rare earths. Trump stated that the tariffs on Chinese goods would be lowered from 57% to 47%, with a specific reduction in fentanyl-related tariffs, from 20% to 10%. The trade agreement is seen as a significant step towards resolving tensions between the two superpowers, although it remains to be seen how long the détente will last, especially as both nations continue to navigate economic and geopolitical challenges.
The meeting, which marked the first face-to-face talks between Trump and Xi since 2019, also saw progress on other fronts, including commitments to increase US soybean purchases and avoid a full-blown trade war. Despite the optimism around the deal, stock markets reacted cautiously, reflecting concerns that the tariff reductions were already anticipated. Trump also noted that the deal included measures to prevent China from imposing new rare earth export restrictions. However, there was no immediate resolution regarding export controls on sensitive US technology or other outstanding trade issues, leaving the future of US-China relations uncertain.