US President Donald Trump announced on Thursday that the United States would reduce tariffs on China to 47 per cent, following face-to-face talks with Chinese President Xi Jinping in Busan, South Korea. This agreement comes in exchange for China resuming its purchases of US soybeans, continuing rare earth exports, and taking action against the illicit trade of fentanyl.
Trump’s comments followed their first in-person meeting since 2019 and marked the conclusion of his whirlwind Asia trip. During the visit, Trump also highlighted trade breakthroughs with South Korea, Japan, and several Southeast Asian nations, according to Reuters.
“I thought it was an amazing meeting,” Trump told reporters aboard Air Force One shortly after leaving Busan. He confirmed that tariffs imposed on Chinese imports would be reduced from 57 per cent to 47 per cent.
Global stock markets reacted with volatility as Trump disclosed the details of the deal. Major Asian indexes and European futures swung between gains and losses. China’s Shanghai Composite Index fell from a 10-year high, while US soybean futures weakened.
Leading up to the meeting, stock markets from Wall Street to Tokyo had reached record highs, fuelled by optimism that the trade war between the two largest global economies might soon see a resolution. The trade war has disrupted supply chains and shaken global business confidence.
The two leaders’ meeting, which lasted nearly two hours on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit, ended with Trump shaking hands and escorting Xi to his car. The US president received a red carpet send-off at the airport.
Trump had been vocal about the potential for an agreement with Xi, with US negotiators announcing on Sunday that they had reached a framework with China to avoid a full 100 per cent tariff on Chinese goods and to defer China’s export restrictions on rare earths—a sector it largely controls.
Despite the optimism, there remain many uncertainties about the longevity of this trade detente, with both countries continuing to stake firm positions in their economic and geopolitical rivalry.