US President Donald Trump held talks with China's President Xi Jinping at a South Korean airbase on Thursday, with the leaders of the world's two largest economies announcing progress on cooling trade tensions.
The discussions in the southern port city of Busan, their first face-to-face meeting since 2019, marked the finale of Mr Trump's whirlwind Asia trip, during which he also touted trade breakthroughs with South Korea, Japan and South-East Asian nations.
Mr Trump said after the meeting that he had agreed with Mr Xi to reduce tariffs on China in exchange for Beijing cracking down on the illicit fentanyl trade, resuming US soybean purchases and keeping rare earth mineral exports flowing.
“I thought it was an amazing meeting,” Mr Trump said aboard Air Force One shortly after he left Busan. He ranked the talks as “12 out of 10”.
Mr Trump said tariffs on Chinese imports would be cut to 47 per cent from 57 per cent. In return, Mr Xi will work “very hard to stop the flow” of fentanyl, a deadly synthetic opioid that is the leading cause of American overdose deaths, the US President said. The tariff was reduced “because I believe they are really taking strong action”, he added.
China agreed to pause export controls announced this month on rare earths, elements that play vital roles in cars, planes and weapons, forming Beijing's most potent source of leverage in its trade war with the US.
The pause would last for a year, China's Commerce Ministry said in a statement, adding that the two sides had also reached consensus on fentanyl co-operation and expanding agricultural trade.
“They're not going to impose the rare earth controls,” Mr Trump said after the meeting.
Mr Xi told Mr Trump via a translator that it was normal for the two leading economies of the world to have friction.
“China's development and rejuvenation are not incompatible with President Trump's goal of ‘Making America Great Again',” the Chinese leader said.
A few days ago, trade negotiators for both countries had reached a “fundamental consensus on addressing each other's primary concerns”, Mr Xi added. “I am willing to continue working with President Trump to lay a solid foundation for China-US relations.”
The meeting, on the sidelines of the Asia-Pacific Economic Co-operation summit, lasted nearly two hours. Mr Trump shook hands and escorted Mr Xi to his car before the US President was given a red carpet send-off at the airport.
Chinese stocks climbed to a decade high and the yuan currency to a near one-year peak against the dollar before the meeting, as investors hoped for an easing of trade tension that has upended supply chains and rocked global business confidence.
World stock markets from Wall Street to Tokyo have hit record highs in recent days.
Mr Trump had repeatedly talked up the prospect of reaching an agreement in his meeting with Mr Xi, after negotiators from both sides appeared to reach an understanding in Kuala Lumpur on Sunday.
But with the countries increasingly willing to play hardball over areas of economic and geopolitical competition, many questions remain about how long any trade detente may last.
The trade war reignited this month after Beijing proposed dramatically expanding curbs on the exports of rare-earth minerals, a sector China dominates.
Mr Trump vowed to retaliate with additional 100 per cent tariffs on Chinese exports, and with other steps including potential curbs on exports to China made with US software – moves that could have upended the global economy.
After a weekend scramble between top trade negotiators, US Treasury Secretary Scott Bessent said before the Trump-Xi meeting that a “substantial framework” would be agreed by the two leaders.
The White House has said it hopes the summit will be the first of several between Mr Trump and Mr Xi in the coming year, including possible visits by the leaders to each country, indicating a protracted negotiation process.
But Mr Trump wants quick progress in talks being closely watched by businesses worldwide.
Mr Trump also said before the meeting that he might sign a final deal with Mr Xi on TikTok, the social media app that faces a US ban unless its Chinese owners divest its US operations.
Previous US-China trade deals, which brought down retaliatory tariffs sharply to about 55 per cent on the US side and 10 per cent on the Chinese side and restarted the flow of rare earth magnets from China, are due to expire on November 10.
Beijing has sought an easing of export controls on sensitive US technology, and an end to new US port fees on Chinese vessels aimed at tackling China's global dominance in shipbuilding, ocean freight and logistics.
During Mr Trump's Asia trip, he signed pacts with Japan and South-east Asian nations on rare earth minerals, seeking to blunt China's stranglehold.
