Trump and Xi Seal One-Year Trade Truce With Tariff Cuts and Rare-Earths Pause

Overview

• Under the agreement announced after their Busan meeting, the U.S. cuts aggregate tariffs on Chinese goods from about 57% to 47% and halves the fentanyl-related tariff from 20% to 10%, while a planned 100% tariff hike is scrapped.
• China will suspend newly announced export controls on rare earths for one year and resume large purchases of U.S. farm goods, including soybeans and sorghum, according to statements from both sides.
• Beijing committed to tougher controls on chemical precursors tied to fentanyl, which the White House cast as part of the rationale for immediate tariff relief.
• Both governments outlined additional steps to ease frictions, including a pause on port and shipping-related measures linked to U.S. Section 301 actions and corresponding Chinese responses.
• The truce is set to be renegotiated annually, the leaders plan reciprocal visits starting with a Trump trip to China in April, and markets reacted cautiously given the lack of detailed enforcement mechanisms.