After their two countries teetered for months on the edge of an all-out trade war, U.S. President Donald Trump and Chinese President Xi Jinping said they’ve reached a trade deal after meeting face-to-face in South Korea.
Trump and Xi spoke Thursday morning in Busan in a highly-anticipated meeting that lasted close to two hours. Trump was accompanied by Secretary of State Marco Rubio, Trade Representative Jamieson Greer, Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, Chief of Staff Susie Wiles, and U.S. Ambassador to China David Perdue. Chief of Staff Cai Qi, Foreign Minister Wang Yi, Vice Foreign Minister Ma Zhaoxu, Vice Premier He Lifeng, Commerce Minister Wang Wentao, and Chairman of the National Development and Reform Commission Zheng Shanjie accompanied Xi.
The deal formalizes a framework agreement between American and Chinese negotiators reached earlier this week.
“I guess, on the scale from zero to 10, with 10 being the best, I would say the meeting was a 12,” Trump told reporters aboard Air Force One after the meeting. “You know, just the whole relationship is very, very important. I think it was very good.”
He added that the U.S. and China “have a deal” that can likely be signed “pretty soon” and that can be renegotiated every year.
“We have not too many stumbling blocks,” Trump said.
Xi also announced that the U.S. and China reached a consensus, according to Chinese state media.
It is not yet clear whether the deal is a comprehensive agreement, but its news comes as a relief to businesses, consumers, and investors after the world’s two biggest economies ramped up levies and export controls in recent weeks. The deal scraps Trump’s threat of a 100% tariff increase, immediately reduces the total tariff rate on Chinese goods, and resolves, at least for now, several of the more contentious trade issues between the U.S. and China.
Thursday was the first meeting between Trump and Xi in six years. Busan rounded off Trump’s three-country tour of Asia, which included the ASEAN summit in Malaysia, Trump’s first meeting with Japan’s new Prime Minister Sakae Takaichi in Tokyo, and the APEC summit as well as a meeting with South Korea’s new President Lee Jae-myung in Gyeongju.
Trump also said he would travel to China in April and Xi would visit the U.S. later next year.
“We do not always see eye-to-eye with each other, and it is normal for the two leading economies of the world to have frictions now and then,” Xi said to Trump in preliminary remarks. “And in the face of winds, waves and challenges, you and I, at the helm of relations, should stay the right course and ensure the steady sailing forward of the giant ship of China-U.S. relations.”
“He’s a very tough negotiator, that’s not good,” Trump said with a laugh in preliminary remarks.
The details of the agreement have yet to be released, but here’s what we know so far about the deal.
Rare earths
China will suspend its rare earths licensing measures for at least a year, according to the Chinese Ministry of Commerce’s statement about the framework agreement. Earlier this month, China announced new licensing requirements for rare earths exports to all countries. The move prompted further hostile measures from the U.S., which had also introduced its own restrictions on China in the weeks before. Experts had speculated that rare earths would be a key piece of leverage for China in trade negotiations with the U.S., as China accounts for around 70% of the world’s supply of critical minerals, which are crucial to the U.S.’s military, semiconductor and auto sectors.
“That road block is gone now,” Trump said, adding that the rare earth issue “has been settled, and that’s for the world. … This was a worldwide situation and not just a U.S. situation.”
He added that the pause could be renewed after a year. “That will hopefully disappear from our vocabulary for a little while,” he said.
Soybean purchases, increased investments
China will also resume its purchases of American soybeans, Trump said. China, which was once the biggest buyer of U.S. soybeans, had effectively frozen new orders of the crop after Trump unveiled his tariffs earlier this year, battering farms across the country. Shortly before the meeting between Trump and Xi, China reportedly bought cargoes of U.S. soybeans in its first known purchase of this season.
Trump also said the Chinese “feel very strongly” about increasing investments in the U.S. and that they had congratulated him on thus far attracting huge sums of foreign investment.
Semiconductor chips
China may also be allowed to buy advanced computer chips from the U.S., which has been another sore point between the two countries. Trump said Beijing will speak with Nvidia’s CEO Jensen Huang with the U.S. acting as a “sort of arbitrator or the referee” but that discussions would not involve the most advanced Blackwell chip.
Lower tariffs on China
China’s Commerce Ministry said in its statement about the framework agreement that the U.S. agreed to suspend Trump’s 24% reciprocal tariff on China for another year. The reciprocal tariff was suspended for 90 days in May following a truce between the U.S. and China, and the suspension was subsequently extended again in multiple 90-day periods. The latest extension was set to expire on Nov. 10.
Greer told reporters on Air Force One that the U.S. will also postpone its Section 301 probe into Chinese shipbuilding which would have involved higher port fees on Chinese ships and prompted retaliatory port fees from China on American ships. China’s Commerce Ministry said the U.S. agreed to suspend the investigation for one year, and that China will also suspend its countermeasures for one year. The Trump Administration has sought investments and partnerships with Asian allies during this trip in line with their goal to “Make American Shipbuilding Great Again.”
And Trump said the U.S.’s 20% fentanyl-linked tariff on Chinese goods would be halved, effective immediately, bringing the total tariff on most Chinese goods down from 57% to 47%. Trump said he and Xi agreed China would take “very strong measures” to reduce the flow into the U.S. of precursor chemicals used to make fentanyl.
“I believe he’s going to work very hard to stop the death that’s coming in,” Trump said.
Security issues, peace talks
Trump said Xi also agreed to work together with the U.S. to end the war in Ukraine.
“We’re both going to work together,” Trump said. “We agree that the sides are locked in fighting and sometimes you have to let them fight I guess. Crazy. But he’s going to help us and we’re going to work together on Ukraine.”
In a pivot from his earlier friendly relationship with Russian President Vladimir Putin and rocky relationship with Ukrainian President Volodymyr Zelensky, Trump has pushed countries to end ties with Russia over its continued bombardment of Ukraine, including threatening tariffs on countries that continue to purchase Russian oil. Trump said talks with Xi, however, did not center on Russian oil, but focused on cooperation to end the war. (China was the biggest buyer of Russian crude oil last year.)
In their preliminary remarks before the meeting, Xi said, “China and the United States can jointly shoulder our responsibility as major countries, and work together to accomplish more great and concrete things for the good of our two countries and the whole world.”
The security of Taiwan, which some had worried would be used as a concession by the U.S. in order to secure better trade terms, was not discussed, Trump said.
China’s foreign ministry said in a readout after the meeting that China “will further deepen reforms comprehensively and expand opening up.” The country has opened itself up to an unprecedented level this year to tourists and immigrants, while it has sought to diversify its trade relationships and position itself as a potential global mediator.
“Economic and trade relations should continue to be the ballast and engine of China-U.S. relations, not a stumbling block or point of conflict,” the readout said, adding that the two sides should finalize the deal soon. “Both sides should consider the bigger picture and focus on the long-term benefits of cooperation, rather than falling into a vicious cycle of mutual retaliation.”
U.S. leaders did not say whether a deal for the purchase of TikTok’s U.S. operations, which was part of the framework agreement, was part of the deal reached Thursday.
The post Trump Hails ‘12’ Out of ‘10’ Meeting With Xi: What to Know About the U.S.-China ‘Deal’ appeared first on TIME.
