Trump and Xi Trade Deal: Reduced Tariff for Rare Earths

US China Trade Truce for One Year

After months of brinkmanship, Presidents Donald Trump and Xi Jinping reached a tentative trade truce during an October 30 meeting in South Korea that pauses several imminent US and Chinese trade measures, calms markets and eases immediate tensions. The agreement mainly delays or halves threatened tariffs and export controls (including rare-earth export restrictions and some US tariffs), revives Chinese purchases of US farm goods, and leaves room for a fuller deal — but it is fragile, provisional, and does not resolve deep structural or geopolitical problems between the two powers.

Key points

• The leaders agreed to roll back or delay a number of impending measures: China will postpone new rare-earth export limits for a year and resume buying US agricultural goods; the US will delay reciprocal tariffs and halve some existing tariff rates tied to fentanyl-related chemical exports.
• The pact is limited and temporary: Trump suggested it might be renegotiated annually and significant US tariffs on Chinese goods remain in place (reported aggregate rate ~47%).
• Major structural issues remain unresolved, including China’s industrial policy, technological self-reliance, and long-standing disputes over market access, subsidies and enforcement — past purchase commitments were unmet.
• The deal reduces immediate risk of escalation but is vulnerable to collapse from negotiation gaps, inexperienced lead negotiators, and unrelated geopolitical crises (e.g., military incidents, tensions over Taiwan); mutual distrust persists.

Trade Truce but Geopolitical Tensions Exist

The nearly 90-minute meeting in Busan that produced a temporary, transactional détente on trade and other issues. China agreed to cuts or pauses on several trade measures (including rare-earth export curbs), increased purchases of U.S. soybeans and energy, and pledged action against illicit fentanyl flows. In return the U.S. offered tariff reductions and a one-year suspension of new Entity List technology restrictions. Analysts caution the deal is a short-term reprieve, not a structural resolution, and markets reacted mutedly.

Washington will delay for one year new Entity List restrictions and suspend targeted measures on maritime logistics and shipbuilding; other technology and geopolitical issues (Nvidia chips, Taiwan) were not resolved. No discussion on Taiwan was important for the West.

The financial markets showed a muted response; experts warn the agreement is transactional, fragile, and may not prevent future tensions if underlying disputes remain. The reason is that any geopolitical friction or event between the US and China can break this trade truce.

It was more of a domestic postering for both countries. For Trump showing progress on the China pledge to crack down on fentanyl flows was key and would lead to halving the tariffs. Also a one-year truce on rare earths was important. This will give the West more time to develop in this area and reduce reliance on China. For China, the temporary suspension of port fees was positive as well as slight reductions in the tariff rate.

Uncertainty in this Trade Deal

President Trump and President Xi reached a one-year truce to de‑escalate a high-stakes trade dispute, including a pause on China’s rare-earths export controls and other measures to ease tensions. The agreement is limited and vague on many key points (agriculture, energy purchases, fentanyl cooperation, TikTok, semiconductors), and analysts warn the truce may be temporary leverage rather than a comprehensive resolution.

Key points

• China agreed to pause the rare-earths export controls for one year; Trump called it a deal likely to be renegotiated annually.
• The U.S. delayed placing certain Chinese subsidiaries on the entity list and agreed to suspend some port fees for one year.
• Trump said tariffs tied to fentanyl were reduced (10% and 20%) and claimed an overall cut in Chinese goods’ tariff rates; details are unclear.
• China reportedly pledged larger agricultural purchases (soybeans), but Beijing’s statements gave few specifics; analysts doubt U.S. concessions were fully reciprocated.
• Many important issues—advanced chips/Nvidia GPUs, concrete purchase commitments, fentanyl cooperation, and TikTok—remain vague or unresolved, so the truce may only be a temporary easing rather than a lasting deal.