Trump and Xi Slash Tariffs in Major Trade Deal Amid Global Power Shift

US-China Trade Talks Update

In Busan, South Korea, Donald Trump and China’s Xi Jinping held their first in-person talks in six years and announced a partial truce. The U.S. cut overall tariffs on Chinese goods from roughly 57% to 47% and halved fentanyl-related tariffs from 20% to 10%. China resumed large soybean purchases, paused new rare-earth export restrictions for a year, and pledged tougher action against fentanyl trafficking.

Trump and Xi framed the talks as a step toward a broader deal, with reciprocal visits planned. Most accounts describe this as a preliminary, extendable one-year arrangement rather than a final settlement. Several outlets also note the nearly two-hour length of the meeting and the context of still-elevated tariffs and export controls that have disrupted supply chains and markets.

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China-US Rare Earths Trade

Rare earths were a central pressure point in recent trade discussions. Multiple sources report that China will suspend or pause new export restrictions for one year. This move aims to stabilize supply chains for U.S. technology, defense, and green industries.

Both China and the U.S. are expected to pursue annual extensions of this arrangement. Meanwhile, Western media highlights Washington's efforts to diversify supply sources with Japan and Southeast Asia. This diversification seeks to reduce dependence on China's dominant position in rare earths.

Market reactions have been mixed due to doubts about the long-term durability of the agreement. Some reports emphasize that Beijing still controls the majority of global processing capacity. This control represents a structural advantage that will outlast any temporary truce.

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Fentanyl Enforcement and Trade

Both sides linked fentanyl enforcement to tariff relief. The U.S. cut the fentanyl-related tariff from 20% to 10%, while Beijing vowed to curb precursor shipments and intensify enforcement. Coverage often ties this linkage to the American opioid crisis and to a broader effort to integrate public-health priorities into trade diplomacy.

Analysts note that while enforcement promises have been made before, the inclusion of measurable tariff steps creates immediate incentives. Verification and cooperation will be tested in the months ahead.

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China-U.S. Trade Resumption

Farm trade was revived as China resumed large U.S. soybean purchases immediately. Some sources cite specific volumes, including 12 million metric tons by January and 25 million metric tons annually for three years. Other reports describe a broader increase in purchases.

Several reports add that Beijing will also buy U.S. energy, including potential Alaskan oil and liquefied natural gas. This farm-energy package is linked to the tariff truce between the two countries.

The agricultural commitments are designed to deliver quick benefits to U.S. farmers after years of tariffs. These commitments are paired with planned reciprocal leader visits to maintain momentum.

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Summary of Strategic Discussions

Strategic issues remain unsettled. Multiple outlets report that Taiwan was not discussed during the talks. Nvidia’s most advanced AI chips continue to face export restrictions.

There was no update regarding TikTok. Some sources highlight former President Trump's controversial vow to resume U.S. nuclear testing and note cooperation on Ukraine. One account presents a stark contradiction by claiming Trump expressed support for Taiwan’s independence while also reporting that defense topics, including Taiwan, were not discussed.

This contradiction highlights confusion and inconsistency across some reports. The absence of a joint statement leaves the terms unclear.

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