In a major diplomatic development, U.S. President Donald Trump announced a sharp reduction in tariffs on Chinese goods following a high-profile meeting with Chinese President Xi Jinping in Busan, South Korea. The two leaders met on the sidelines of the 2025 APEC Summit, marking their first face-to-face encounter since Trump’s return to the White House. Their talks, described by Trump as “amazing” and “a 12 out of 10,” appear to have eased years of economic tension between Washington and Beijing.
Following the meeting, President Trump confirmed that the U.S. would reduce the overall tariff rate on Chinese imports from 57 percent to 47 percent—a significant 10-point drop. He also announced a decrease in tariffs tied to products linked to the fentanyl supply chain, cutting them from 20 percent to 10 percent. Trump justified the move by saying it was part of a “fair and balanced deal” under which China agreed to take stronger measures to curb the flow of fentanyl and its chemical precursors into the United States.
In return for the tariff relief, Beijing made several key concessions. China agreed to resume large-scale purchases of American agricultural products, particularly soybeans, which had been heavily affected by previous trade restrictions. This is expected to provide a substantial boost to U.S. farmers, many of whom had suffered from declining exports during the prolonged trade conflict. Furthermore, China promised to roll back export controls on rare-earth minerals for one year—a major concession that could ease pressure on the global technology and defense industries, which depend heavily on Chinese rare earths.
Trump hailed the agreement as a “big step forward” in stabilizing trade relations with China. He told reporters that Xi had shown “great respect and cooperation” and that both countries were now entering a “new phase of fair trade.” However, he also cautioned that more negotiations would follow, hinting at a possible “Phase Two” deal to address issues like technology transfer, intellectual property, and AI competition. Xi Jinping, on his part, characterized the meeting as an “important moment for peace and development,” emphasizing that China sought stability rather than confrontation in its trade relations with the United States.
The tariff cut marks a thaw in what had been an increasingly tense economic relationship between the world’s two largest economies. Earlier in 2025, Trump had imposed sweeping tariffs on Chinese imports, escalating a trade war that disrupted global supply chains and led to retaliatory measures from Beijing. The Busan breakthrough now signals a willingness on both sides to ease hostilities and find common ground on economic and security issues.
Analysts see the move as a strategic recalibration rather than a full reconciliation. The tariff reduction, while significant, still leaves rates well above pre-trade war levels, meaning Chinese goods will remain subject to substantial U.S. duties. Moreover, the rare-earth deal is set to expire in one year, suggesting that both sides are treating this as a temporary truce rather than a long-term peace agreement. Many experts believe the U.S. will use the coming months to test China’s compliance before committing to further tariff rollbacks.
For President Trump, the timing of the announcement carries political weight. With the 2026 midterm elections approaching, the move could bolster his image as a dealmaker capable of balancing toughness with pragmatism. The resumption of agricultural exports will likely play well with U.S. farmers—a key voting bloc that had been affected by the earlier trade disruptions. For Xi, the easing of tariffs provides economic breathing space at a time when China’s manufacturing sector is struggling with slower growth and supply-chain disruptions.
Despite the optimistic tone from both leaders, unresolved issues remain. The U.S. continues to restrict high-end semiconductor exports to China and has shown no indication of lifting sanctions on Chinese technology firms such as Huawei. Similarly, Beijing remains cautious about allowing foreign companies full access to its domestic markets. These structural disputes could resurface once the initial goodwill from the Busan meeting fades.
Still, the Trump–Xi meeting in South Korea represents a significant diplomatic moment. It demonstrates that both Washington and Beijing are capable of cooperation when national interests align. The tariff cuts may not end the economic rivalry between the two powers, but they do open a window for dialogue—and perhaps a path toward a more stable global trade environment. For now, the world watches as the two leaders, once fierce adversaries in a tariff war, take tentative steps toward what could be the beginning of a new trade détente.