China and the US have agreed a one-year deal that includes a tariff cut, the suspension of some export controls on rare earths and semiconductors and a pause on extra levies placed on one another’s ships. The deal came after what Donald Trump called an “amazing” 100-minute meeting with Xi Jinping in the South Korean port city of Busan on Thursday.
The United States president announced an immediate 10 per cent cut in tariffs imposed on China. He said that Mr Xi agreed to pause controls on exports of rare earths for a year and to resume Chinese purchases of American soybeans.
Mr Trump said he was halving a 20 per cent levy imposed on China on account of its alleged failure to halt the export of chemicals used to produce the drug fentanyl. He said the cut, which brings the tariff on China to 47 per cent, followed a promise by Mr Xi to “work very hard” to address the problem.
“It was an amazing meeting,” Trump said.
READ MORE
“I guess on the scale from zero to 10, with 10 being the best, I would say the meeting was a 12.”
[ Donald Trump vs Xi Jinping: who holds the stronger hand?Opens in new window ]
The US president said that Mr Xi agreed to pause sweeping controls on the export of rare earths used in the manufacture of everything from cars and aircraft to consumer electronics. China has a near-monopoly on the minerals, refining 90 per cent of the world’s supply.
China has also agreed to start buying soybeans from the US after an effective boycott of the oilseed since the beginning of this year. China bought almost half of the US crop last year and reopening the market was a key demand of American farmers.
Mr Trump said he and Mr Xi had discussed the issue of semiconductors and US restrictions on the sale to China of the most advanced microchips. He said Beijing would have to negotiate with semiconductor manufacturer Nvidia but he indicated that the company’s latest Blackwell chips were not discussed.
China’s commerce ministry later confirmed the year-long suspension of its latest rare earths export controls and said the US had agreed to suspend the extension of restrictions on the sale of technology to subsidiaries of Chinese companies overseas.
At the start of the meeting, Mr Xi described the US and China as “partners and friends” telling Mr Trump that China’s development went hand in hand with the ambition to “make America great again”. But he said it was normal for the world’s two biggest economies to experience friction from time to time.
Mr Xi praised Mr Trump’s involvement in efforts to achieve peace in Gaza and to end a border conflict between Cambodia and Thailand. And he suggested that Beijing and Washington could work together to address global issues.
“I look forward to exchanging views with you on questions important for our two countries and the world,” Mr Xi said. Mr Trump said that the two leaders discussed Ukraine during their meeting although he appears not to have asked Mr Xi to buy less Russian oil. And the US president said the subject of Taiwan did not come up.
The official Chinese account of the meeting offered no details of the agreement but said the two negotiating teams had reached a consensus on how to solve their problems. It said both teams now had to refine and finalise the agreement as soon as possible so they can deliver on it and boost both economies and that of the world.
“Economic and trade relations should continue to be the ballast and engine of Sino-US relations, not a stumbling block or point of conflict. Both sides should consider the long-term benefits of co-operation and avoid falling into a vicious cycle of mutual retaliation,” the Chinese readout said.
Mr Trump said after the meeting that he would visit China next April and that Xi would visit the US later next year.
