Trump and Xi’s Surprise Breakthrough: Tariffs Slashed, Trade Back on Track After South Korea Meeting
Donald Trump called his latest meeting with Chinese
President Xi Jinping “a 12 out of 10.” And judging by what came out of it, he
wasn’t exaggerating. The two leaders met in South Korea and walked away with
what looks like the biggest thaw in U.S.–China relations in years.
Trump announced that the U.S. will cut tariffs on China from
20% to 10% on certain goods—specifically those linked to the fentanyl chemical
trade. That move lowers the total tariff rate on Chinese imports from 57% to
47%. In return, Beijing agreed to resume exports of rare earth elements
(crucial for U.S. tech and defense industries) and start purchasing American
soybeans again.
“On a scale of 0 to 10, I’d say the meeting was a 12,” Trump
said aboard Air Force One.
Treasury Secretary Scott Bessent confirmed the details,
adding that China will buy 25 million metric tons of U.S. soybeans each year
for the next three years—starting immediately with 12 million tons by January.
That’s a massive win for U.S. farmers who’ve been stuck in limbo since the
trade war froze exports.
“So our great soybean farmers, who were used as political
pawns, are finally back in business,” Bessent told Fox Business.
Trump also revealed plans to visit China in April, with Xi
expected to make a return trip to the U.S. later in 2026. Both leaders
discussed easing restrictions on high-end technology exports, including
advanced computer chips. Nvidia, Trump mentioned, will soon start direct talks
with Chinese officials.
“We could have a full trade deal pretty soon,” Trump said
confidently.
According to Chinese state media, Xi agreed that both
countries need to restore “peace of mind” to global markets. He added, “It’s
normal for two leading economies to have differences, but we should focus on
cooperation, not retaliation.”
A cautious calm after years of tension
Despite the optimistic tone, deep-rooted tensions remain.
The U.S. and China are still competing fiercely in AI, defense tech, and global
influence—especially amid ongoing conflicts like Russia’s war in Ukraine.
Trump’s aggressive use of tariffs and China’s retaliatory
export curbs on rare earths had created economic strain on both sides. But now,
both leaders seem to recognize that escalating the trade war could do more harm
than good.
The setting of their meeting was surprisingly modest—a small
gray building on a South Korean military base near Busan’s airport, far from
the luxury summit venues of past diplomatic encounters. Yet, the symbolism was
powerful: two global giants trying to find common ground, not stage glamour
shots.
Investors breathe easier
The financial world noticed. U.S. markets rallied on the
news, hopeful that this new framework could stabilize global trade. American
tech companies, which depend on rare earths, and agricultural sectors both got
a major confidence boost.
Still, not everyone is convinced the calm will last.
Craig Singleton, senior director at the Foundation for Defense of Democracies,
put it bluntly:
“This looks like short-term stabilization dressed up as
strategic progress. The rivalry is far from over.”
That pattern has repeated before—breakthroughs followed by
setbacks. Earlier trade talks in Geneva and London fizzled as both sides sought
leverage.
The bigger picture
Trump had earlier threatened to hike tariffs as high as
145%, then 100%, before settling on the new 47% figure. Xi, for his part,
tightened rare earth exports earlier this month, only to loosen them again
right before this meeting. It’s a dance both sides know well: push hard, then
pull back to the table.
As the two leaders part ways—Trump returning to Washington
and Xi staying in South Korea for the APEC summit—the next few weeks will
determine if this “12 out of 10” meeting truly changes the tone of U.S.–China
relations or simply pauses another round of trade warfare.
For now, at least, global markets and farmers are breathing
a little easier.
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