U.S. President Donald Trump and Chinese President Xi Jinping met for an hour and a half on Thursday morning (30) in Busan, South Korea. It was the first meeting between the two leaders in six years, and they agreed to scale back the trade measures imposed since the beginning of Trump’s tariff-heavy policy.
The agreement, negotiated earlier by the delegations of both countries in Malaysia, includes the removal of specific tariffs and a one-year suspension of several trade restrictions between China and the United States.
After the presidential meeting, China’s Ministry of Commerce issued a statement detailing the commitments reached.
According to the official note, the United States will remove the additional 10% tariff on Chinese products imposed under the pretext of combating fentanyl, popularly known as the “fentanyl tariff.” At the same time, Washington will keep suspended, for another year, the reciprocal 24% tariff on goods from China, Hong Kong, and Macau. In return, Beijing will adjust its retaliatory trade measures proportionally.
China will suspend for 12 months the equivalent countermeasures enacted on October 9, according to the ministry. Although the statement did not specify, the measures announced that day referred to export controls on rare earth technologies by the Ministry of Commerce.
Trump enthusiastically celebrated the deal on his account in Truth Social while flying back to the United States. “I was extremely honored that President Xi authorized China to begin purchasing massive quantities of soybeans, sorghum, and other agricultural products,” he wrote. “Our farmers will be very happy!”
The Chinese side did not mention any commitment to large-scale agricultural purchases, only a “consensus on issues such as (…) expanding agricultural trade.”
The easing of some Chinese retaliatory tariffs may result in renewed purchases of U.S. agricultural goods.
Although Trump celebrates it as a win, the crisis in the U.S. soybean agribusiness sector was a direct consequence of his own trade policies. After the United States imposed tariffs on Chinese products, Beijing retaliated by imposing tariffs on U.S. agricultural imports, making them more expensive for Chinese buyers.
As a result, China shifted its soybean imports primarily to Brazil and Argentina, redirecting trade flows that previously favored U.S. producers.
The agreement package also includes a temporary suspension of the 50% ownership “penetration rule” on U.S. export controls announced on September 29.
The 50% penetration rule on export controls, announced by the U.S. on September 29, extended trade restrictions to any entity that is 50% or more owned, directly or indirectly, by companies included on the U.S. Entity List. In practice, the measure significantly broadened the reach of sanctions, targeting subsidiaries and companies controlled by already-sanctioned entities, even if those subsidiaries were not explicitly listed, expanding the scope of trade restrictions imposed by Washington.
This rule may have encouraged the Dutch government’s intervention in Nexperia. China’s rare-earth-related export controls had been implemented in response to this rule.
Washington will also halt for one year the Section 301 investigations into China’s maritime, logistics, and shipbuilding sectors. Beijing will respond by suspending countermeasures imposed on U.S. companies in those areas. Both countries also agreed to extend some existing tariff exemptions.
China calls for stability
“In the face of winds, waves, and challenges, you and I, steering China–U.S. relations, must hold the course, navigate this complex landscape, and ensure steady progress for the great ship of China–U.S. relations,” Xi told Trump.
Xi stated that it is normal for the world’s two largest economies to face occasional friction due to different national conditions, but maintained that China and the United States “are fully capable of helping each other succeed and prosper together.”
The agreement includes Chinese commitments to maintain open supply of rare earths, critical minerals, and magnets, essential inputs for U.S. technology and defense industries. Beijing also agreed to intensify joint efforts to combat fentanyl trafficking into U.S. territory, the issue Trump had used as justification for the now-scrapped 10% tariff.
Trump said he discussed the potential Chinese acquisition of U.S. energy resources: “A large-scale transaction may occur regarding the purchase of oil and gas from the Great State of Alaska,” he posted.
China’s Ministry of Commerce confirmed previous agreements reached in Madrid regarding investment issues and indicated that China and the United States will work to resolve outstanding matters involving TikTok.
Xi stressed that China’s development and Trump’s agenda to “make America great again” are not incompatible. “The two countries are fully capable of helping each other succeed and prosper together. China and the U.S. should be partners and friends,” he said.
The Chinese leader also expressed willingness to cooperate on sensitive regional issues. “The world today faces many difficult problems. China and the U.S. can take on their responsibilities as major countries and work hand in hand to accomplish more great, concrete, and positive undertakings,” Xi stated.
China’s Ministry of Commerce emphasized that the results of the Kuala Lumpur consultations show that “through dialogue and cooperation in the spirit of equality, respect, and reciprocity, solutions can be found.” The ministry said it expects both countries to properly implement the agreements, “injecting greater certainty and stability into China–U.S. economic and trade cooperation and the global economy.”
The suspension of tariff measures is valid for 12 months, with a review scheduled by the technical teams of both countries at the end of the period.
Nuclear threat
Despite the cordial tone of the meeting, just hours before seeing Xi, Trump announced on his social media that the United States was resuming nuclear weapons testing. “Russia is second, and China a distant third, but they will be tied within 5 years. Because of other countries’ testing programs, I have instructed the Department of War to begin testing our nuclear weapons,” he wrote, claiming the process would begin immediately.
