Trump and Xi met Trump cut China import taxes and ended limits on special minerals
In a significant development for global trade, US President Donald Trump and Chinese President Xi Jinping met in South Korea, resulting in a breakthrough agreement aimed at easing long-standing economic tensions between the two superpowers.
During the meeting, President Trump announced that the United States will reduce tariffs on Chinese goods cutting the so-called “fentanyl tariff” from 20% to 10%. In response, China agreed to lift export restrictions on rare earth minerals, which are vital components in electronics, renewable energy, and defense technology.
“This meeting marks the beginning of a new era of fair and balanced trade between our nations,” Trump said after the talks. “Our farmers, manufacturers, and consumers will all benefit from this progress.”
Chinese President Xi Jinping echoed a tone of cautious optimism, stating that while both nations have their differences, “mutual respect and cooperation can overcome rivalry.”
A Strategic Move for Both Economies
According to trade analysts, this agreement offers short-term relief for industries dependent on Chinese imports, while signaling a broader effort to stabilize global supply chains. The decision also follows months of negotiations regarding technology exports, semiconductor access, and energy cooperation.
Economist Stefanie Kam from Singapore’s Nanyang Technological University said,
“Both Trump and Xi achieved what they needed domestically a sign to their citizens that engagement and pragmatism still work amid rivalry.”
The talks also touched on fentanyl control measures, agricultural trade, and future collaboration on AI and technology sectors.
The Rare Earth Factor
China currently dominates over 60% of the global rare earth production and controls nearly 90% of its processing, giving it immense leverage in high-tech supply chains. With China’s decision to relax export controls, the US and other Western countries could see reduced dependency in the short term a relief for industries producing electric vehicles, chips, and renewable technologies.
Meanwhile, the Trump administration continues investing in domestic alternatives, such as the Mountain Pass Mine in California, and pursuing partnerships with allies like Australia and Brazil.
Looking Ahead
While no formal agreement has been signed yet, both sides emphasized their intent to finalize a comprehensive trade deal soon. Trump described the outcome as “a fantastic step forward,” while analysts warned that deeper disputes including those over Taiwan, TikTok, and advanced chip technology still remain unresolved.
Nonetheless, the Busan summit has been hailed as a major diplomatic milestone, offering hope for a more predictable and cooperative phase in US-China relations.
