Trump, Xi Seal Rare Earths and Tariff Deal in Busan, Marking Fresh US-China Trade Truce

In a significant diplomatic milestone, US President Donald Trump and Chinese President Xi Jinping concluded a high-stakes meeting in Busan, announcing multiple trade and economic agreements that signal a major thaw in US-China relations.

The meeting, which Trump hailed as “amazing” and “a fantastic new beginning,” resulted in a 10% tariff reduction on Chinese imports, renewed soybean purchases, and a breakthrough on rare earth exports — minerals crucial to high-tech, defence, and clean energy industries.

Rare Earths Deal Ends Months of Uncertainty

Trump confirmed that the long-standing impasse over rare earth mineral exports had been resolved. “All the rare earth issues have been settled,” he said, assuring that exports would continue under a new one-year arrangement.

A US official added that the deal could ease supply chain concerns for American technology and defence manufacturers who rely on rare earth components from China.

Tariff Rollback and Soybean Pact

Trump announced a 10% tariff cut, reducing levies on Chinese goods from 57% to 47%, calling it a “gesture of good faith” after constructive talks.

He also said China will resume soybean purchases, describing it as a major win for US farmers affected by the trade war. “Large amounts of soybeans and farm goods will be purchased immediately,” he stated.

This development comes as welcome news for agriculture markets, which have struggled since Beijing halted imports earlier in the year amid escalating tariff tensions.

Fentanyl Cooperation and Diplomatic Momentum

Addressing another major issue, Trump said Xi pledged to strengthen controls over fentanyl production, a critical concern for the US given its opioid crisis. In return, Trump reduced the fentanyl-related tariff from 20% to 10%, emphasizing cooperation over confrontation.

Both leaders agreed to further dialogues to enhance mutual trust and trade transparency. Trump announced he would visit China in April 2026, with Xi expected to make a reciprocal visit to the United States later in the year.

Interestingly, the Taiwan issue did not feature in their discussions — an unusual omission that underscores the meeting’s focus on economic cooperation.

A Tentative Thaw in Relations

The Busan summit marks the first face-to-face meeting between the two leaders since their return to office and sets the stage for a possible long-term truce.

“This was a one-year agreement that will be extended,” Trump said before boarding Marine One. “We’re going to have a fantastic relationship for a long time.”

The White House is expected to release a detailed joint statement later this week outlining the main points of the Busan understanding.