US President Donald Trump announced on Thursday that he had reached a trade breakthrough with Chinese President Xi Jinping, agreeing to reduce US tariffs on Chinese goods in exchange for Beijing resuming American soybean purchases and keeping rare earth exports flowing. The two-hour meeting in the South Korean city of Busan, held on the sidelines of the APEC summit, marked their first face-to-face talks since 2019 and concluded Trump’s five-day Asia tour focused on trade cooperation and economic revival.
The agreement is expected to delay China’s proposed export restrictions on rare earth minerals for at least one year while providing relief to American farmers through renewed Chinese purchases of US soybeans. Trump confirmed that Beijing had also agreed to intensify its crackdown on the illicit trade of fentanyl and precursor chemicals used to manufacture the deadly synthetic opioid. The development brought optimism to global markets, with Chinese stocks hitting a decade high and world indices from Wall Street to Tokyo reaching record levels amid hopes of easing trade tensions.
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During the meeting, Trump emphasized that the deal represented a “substantial framework” for stabilizing economic relations between the world’s two largest economies. He said he aims to reduce tariffs further once Beijing demonstrates progress in curbing illegal fentanyl exports and maintaining open trade channels. Xi, meanwhile, expressed willingness to strengthen cooperation, saying occasional frictions between the two powers were “normal” but could be overcome through mutual understanding. Both sides agreed to continue negotiations, signaling that the détente may extend into the coming year.
The talks also took place against a backdrop of rising geopolitical tensions, including concerns over Taiwan and China’s expanding regional influence. Trump’s administration has insisted that trade cooperation will not compromise US commitments to allies, while also acknowledging the strategic importance of balancing competition and collaboration with Beijing. US Secretary of State Marco Rubio reassured that Taiwan’s security would not be compromised in the process, reaffirming Washington’s legal obligation to provide the island with means for self-defense.
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Earlier, US Treasury Secretary Scott Bessent stated that the deal would extend prior tariff reductions and restart the flow of rare earth magnets critical to technology and defense industries. Beijing has also requested the lifting of 20% tariffs related to fentanyl and a rollback of port fees imposed on Chinese shipping. Although both sides remain cautious about the long-term stability of the agreement, Trump described the meeting as “the start of a new trade era,” pledging to build on the progress through future leader exchanges and continued dialogue.