Synopsis: In a major shift toward easing US–China trade tensions, President Donald Trump announced a 10% cut in tariffs on Chinese goods following a successful meeting with President Xi Jinping in Busan. The decision includes renewed Chinese purchases of US soybeans, a deal on rare earth exports, and cooperation on fentanyl control — marking the first significant thaw in trade relations in years.
In a move that could redefine global trade dynamics, US President Donald Trump on Thursday announced a 10% reduction in tariffs on Chinese imports, calling it a “gesture of good faith” after a high-stakes meeting with Chinese President Xi Jinping.
The tariff rollback — from 57% to 47% — is the first major reversal of Washington’s steep duties imposed during Trump’s “America First” trade policy era. Speaking after more than two hours of closed-door talks in Busan, Trump said the discussions were “amazing” and marked a turning point in US–China relations.
“China will immediately start buying soybeans again. That’s a big win for our farmers,” Trump told reporters. “The trade relationship is going to look very different now.”
A Step Toward Trade Normalisation
US officials confirmed that the tariff cut takes immediate effect, covering a broad range of consumer and industrial products. Analysts say this move signals an effort by both nations to stabilize markets and restore business confidence after years of tariff escalations that strained the global economy.
Economists also view this as part of a broader attempt to reset strained ties between the world’s two largest economies and prevent further disruptions to global supply chains.
Rare Earth Breakthrough and Agricultural Reset
Beyond tariff relief, both nations reached an agreement on rare earth exports, a critical issue that had impacted high-tech and defence industries worldwide.
“All the rare earth issue has been settled — no more roadblocks,” Trump declared, saying the deal ensures continued access to essential materials for US industries.
Additionally, China has agreed to resume large-scale purchases of American soybeans, which had declined sharply after previous trade tensions. The move is seen as a major boost for American farmers, particularly in the Midwest, who faced severe losses during the earlier tariff wars.
Cooperation on Fentanyl and Diplomatic Exchange
On the diplomatic front, Trump revealed that Xi pledged to intensify efforts to curb fentanyl production, an issue Washington has long linked to the US opioid crisis.
Both leaders also agreed to exchange state visits — with Trump set to visit China in April 2026, followed by Xi’s visit to the United States later in the year.
Interestingly, Trump noted that Taiwan “never came up” in their talks — an unusual omission given the issue’s sensitivity in US–China relations. Experts suggest this may have been a strategic choice to maintain a positive tone and focus on economic cooperation.
A Reset in the Making
Global markets have reacted positively to the announcement, with analysts predicting a short-term boost to trade sentiment and reduced uncertainty for multinational corporations operating across the Pacific.
While the rollback represents only a fraction of total tariffs still in place, it marks a symbolic step toward rebuilding trust and reopening dialogue between Washington and Beijing after years of economic confrontation.
As Trump put it, “This is not the end of the trade war — it’s the beginning of a better relationship.”
Disclaimer: This article is based on recent statements and official briefings following the US–China trade talks in Busan. It is intended for informational purposes only and should not be interpreted as financial, political, or investment advice.
