US president Donald Trump and China's president Xi Jinping met in South Korea yesterday to discuss a variety of topics, with the main order of business being the ongoing trade and tariff escalations between their respective nations. After a 90-minute discussion, the two have agreed to postpone certain export controls as part of a one-year trade truce, which looks to be a significant cooling of the trade rhetoric between the two governments.
Speaking to reporters on Air Force One as he returned to US soil yesterday, Trump seemed particularly pleased with the discussions (via The Financial Times). "On a scale of 0-10, with 10 being the best, the meeting was a 12," he said, also describing the talks as "amazing."
"We have not too many stumbling blocks," the US president continued. "Every year we will review the deal, but I think the deal will go… long beyond a year."
Trump went on to confirm that the two had settled a dispute over rare earths, after the Chinese Ministry of Commerce previously announced that government approved licenses would be required before the vital materials could be exported by foreign companies. The Chinese commerce ministry confirmed after the talks that rare earth export controls would now be paused, although some earlier restrictions appear to remain.
As for chip restrictions, Trump said that the leaders had discussed semiconductors, and that Nvidia would resume discussions with China about exporting chips. However, he also said that the discussions did not cover the most advanced microelectronics, including Nvidia Blackwell, which suggests existing long-running chip restrictions may remain in place for now.
Reports had previously indicated that the Trump administration was planning new curbs on products made with US software, but these latest announcements would suggest those plans to also be on hold.
Additionally, Trump had previously announced plans to lower a 20% tariff related to the export of fentanyl ingredients before the talks began. He later confirmed to reporters after the talks that tariffs on Chinese imports would be cut to 47% from 57% due to a drop in fentanyl-related tariffs to 10%.
According to the FT, Chinese outlet People's Daily quoted Xi Jinping as saying, in relation to the talks: "Both teams should refine and finalise the follow-up work as soon as possible, uphold and implement the consensus, and deliver tangible results." China's commerce ministry said that it had also agreed to "work with the US to properly resolve issues related to TikTok", among other agreements.
However, concrete details on other tariff and trade changes seem light on the ground, so it remains to be seen exactly how many of these agreements will be implemented.
Still, after a year in which both nations have repeatedly escalated their rhetoric regarding trade disputes, these face-to-face talks between their respective leaders seem to have gone particularly well. It remains to be seen exactly what this truce will look like in the months and years to come, as trade deals can take years to finalise, but it certainly seems to be a positive step for relations between the two countries.
