In a high-stakes diplomatic encounter that capped weeks of escalating tensions, U.S. President Donald Trump and Chinese President Xi Jinping emerged from a nearly two-hour meeting in Busan, South Korea, on October 30 with a framework agreement aimed at de-escalating the year-long trade and tariff skirmishes between the world’s two largest economies. Described by Trump as “a 12 out of 10” and an “outstanding group of decisions,” the deal averts an imminent 100% U.S. tariff hike on Chinese goods and includes reciprocal concessions on fentanyl-related levies, agricultural purchases, and rare earth exports. While hailed by the White House as a “massive victory” for American workers and farmers, the accord has drawn mixed reactions, with critics labeling it a temporary pause rather than a comprehensive resolution, and some analysts suggesting China extracted more strategic leverage.
The summit, held on the sidelines of the Asia-Pacific Economic Cooperation (APEC) forum at Gimhae International Airport, marked the first face-to-face talks between the two leaders since 2019. It followed five rounds of preparatory negotiations in European and Asian capitals, including Kuala Lumpur, where U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng laid the groundwork. Trump arrived amid a backdrop of domestic pressure—farmers battered by halted soybean exports and manufacturers facing supply chain disruptions from Beijing’s rare earth curbs—while Xi sought to project stability amid China’s slowing growth and a ballooning trade surplus.
Key outcomes include:
- Tariff Reductions and Suspensions: The U.S. will immediately lower tariffs on Chinese imports linked to fentanyl precursor controls by 10 percentage points, dropping the cumulative rate from 57% to 47%. In return, China has suspended its retaliatory tariffs announced since March 2025 and agreed to a one-year extension of a truce on additional levies, preventing Trump’s threatened 100% escalation set for November 1. The White House fact sheet emphasized this as a step toward “rebalancing trade,” with the fentanyl-specific cuts tied to Beijing’s pledge to halt shipments of designated chemicals to North America and tighten global export controls on others.
- Agricultural and Supply Chain Relief: China committed to resuming purchases of U.S. soybeans, which had been frozen since early 2025, providing a lifeline to American Midwest farmers who lost billions in exports. This echoes Phase One of the 2020 trade deal but comes with no firm volume targets, leaving room for future haggling.
- Rare Earth and Technology Deferrals: Beijing agreed to delay for at least one year its new export restrictions on rare earth minerals—critical for U.S. electric vehicles, defense tech, and semiconductors—granting a general license that effectively lifts controls imposed in April 2025 and October 2022. The U.S. reciprocated with a one-year suspension of Entity List restrictions, easing access for Chinese firms to American technology affiliates, and a moratorium on port fees for Chinese ships. Trump also floated discussions on easing Nvidia chip export curbs, though no firm commitments emerged.
- Non-Tariff Measures: China will remove certain U.S. companies from its “unreliable entity” list, while both sides pledged to curb non-tariff barriers, including monopolies inquiries and sanctions.
Markets reacted with cautious optimism: U.S. soybean futures jumped 4% post-announcement, while the S&P 500 notched a 1.2% gain, buoyed by reduced escalation risks. However, the yuan strengthened only modestly against the dollar, and crypto assets—sensitive to liquidity flows—saw $250 million in long positions liquidated amid initial uncertainty. On X (formerly Twitter), sentiment was polarized: some users decried the lack of a joint statement as a “worst-case signal” for global coordination, while others viewed it as a pragmatic step back from the brink.
Roots of the Renewed Rivalry: A Timeline of Escalation
The Trump-Xi meeting traces its origins to the simmering U.S.-China trade war that Trump ignited in 2018 with 25% tariffs on $300 billion in Chinese goods, aimed at curbing intellectual property theft and the bilateral deficit. A Phase One deal in January 2020 paused the pain—China pledged $200 billion in U.S. purchases—but faltered amid COVID-19 disruptions and Beijing’s non-compliance, prompting a U.S. Trade Representative investigation in 2021.
Trump’s 2025 return to the White House amplified the feud. In April, he slapped 20% fentanyl-linked tariffs on Chinese imports, citing over 100,000 U.S. overdose deaths annually tied to precursor chemicals from China. Beijing retaliated with rare earth export curbs in October 2022 and April 2025, leveraging its 90% global monopoly to hit U.S. supply chains for EVs and defense. By mid-October, Trump threatened 100% tariffs starting November 1, while China froze soybean orders and added U.S. firms to its entity lists, spiking inflation to 3% in the U.S. and pressuring China’s export-dependent economy.
Preparatory talks yielded partial wins: U.S. pacts with Australia, Japan, Thailand, and Malaysia on rare earth alternatives diversified supply, but experts like Hudson Institute’s Michael Sobolik warned that without a Xi deal, Indo-Pacific allies could tilt toward Beijing. The Busan summit, Trump’s capstone to a week of Indo-Pacific diplomacy, blended personal rapport—Trump gifted Xi a signed baseball—with hardball negotiations, echoing their 2017 Mar-a-Lago chemistry.
Winners, Losers, and Lingering Shadows
For the U.S., the deal offers immediate relief: soybean farmers regain a key market (China bought $14 billion pre-2025), and tariff cuts could shave 0.5% off inflation by easing consumer goods prices. Tech firms like Nvidia benefit from deferred chip bans, potentially unlocking $50 billion in sales. Trump framed it as “America First” leverage, suspending reciprocal tariffs until November 2026 while securing fentanyl controls—a bipartisan priority after Senate pushback on broader levies.
China, facing 5.2% GDP growth forecasts and domestic stimulus needs, secures export stability at rates akin to Asian peers, bolstering its $18 trillion economy. Xi’s deferral of rare earth curbs—without granting exemptions to U.S. allies—preserves leverage, and soybean buys signal goodwill without Phase One-scale commitments. State media portrayed Xi as the unyielding statesman, with the commerce ministry confirming “adjustments” to countermeasures.
Yet fragility looms. The one-year timeline invites future flare-ups, with unresolved issues like IP theft, subsidies, and Taiwan tensions. Atlantic Council experts note it’s a “truce, not peace,” as U.S. firms face ongoing entity list risks and China’s trade surplus—projected larger than 2024’s—could reignite deficits. On X, reactions ranged from crypto traders lamenting liquidity hits to conservatives decrying concessions as a “CCP win.”
As implementation begins November 10, the deal tests both leaders’ brinkmanship. For global markets, it’s a breather; for geopolitics, a reminder that economic interdependence tempers outright war—but doesn’t end it.
