U.S. and China agree on temporary trade truce

U.S. President Donald Trump and Chinese President Xi Jinping met Wednesday in Gyeongju on the sidelines of the Asia-Pacific Economic Cooperation meeting and agreed to ease trade measures against each other.

The United States will cut tariffs on China, imposed over weak enforcement of the synthetic opioid fentanyl, from 20% to 10%. China will delay recently announced strict export controls on rare earths. The move effectively establishes a temporary truce in the escalating trade war. The two leaders did not discuss Taiwan, a highly sensitive security issue.

Trump and Xi met for the first time in more than six years since their 2019 G20 summit in Japan. By agreeing to avoid extreme confrontations through direct talks, they provided temporary relief to the global economy, strained by the trade war. Analysts warned that potential risks remain, leaving the dispute vulnerable to renewed tensions.

The expanded summit lasted about one hour and 40 minutes at Naraemaru in Busan’s Gimhae Air Force Base, with aides in attendance. After the meeting, Trump told reporters aboard Air Force One that tariffs on China would be cut in half immediately and that rare earth issues had been resolved. U.S. Trade Representative Katherine Tai confirmed that China would continue supplying rare earths, calling it “a very important matter.” Trump added that China would immediately purchase large quantities of U.S. soybeans and other agricultural products.

Trump indicated there would be no major easing of U.S. semiconductor export restrictions to China. He said companies such as Nvidia would negotiate with China, but advanced chips under the “Blackwell” program were not part of the talks. On Taiwan, Trump said the topic was not discussed, suggesting both sides deliberately avoided it to keep trade negotiations on track.

During the summit, Trump announced plans to visit China in April next year, followed by a visit from Xi to the United States. In opening remarks, both leaders hinted at subtle tensions. Trump said the two countries had already agreed on many issues and expected further agreements. Xi said U.S.-China relations were generally stable but added that differences were natural given each country’s circumstances. Analysts interpreted the comments as acknowledging recent trade disputes.


Jin-Woo Shin niceshin@donga.com