Trump Declares “Amazing Meeting” as US China Trade War Gets One-Year Pause

TLDR

• President Trump and Xi Jinping held a 90-minute meeting in South Korea to establish a one-year trade truce between the US and China
• China will suspend export controls on rare earth materials for one year while the US reduces fentanyl-related tariffs from 20% to 10%
• The US will suspend for one year a rule expanding trade restrictions to entities 50% owned by sanctioned companies
• Trump announced the US will mediate talks between China and Nvidia CEO Jensen Huang regarding restricted chip usage
• China agreed to immediately resume purchasing large quantities of US soybeans

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President Donald Trump and Chinese President Xi Jinping completed a 90-minute meeting in South Korea to establish a temporary trade agreement. The meeting aims to pause the ongoing trade dispute between the world’s two largest economies for at least one year.

The discussions focused primarily on Trump’s tariffs on Chinese goods and China’s export controls on rare earth materials. Both leaders addressed key trade issues that have affected markets over recent months.

China’s commerce ministry announced it will suspend implementation of relevant export control measures for one year. Earlier in October, Beijing had tightened controls on rare earths and other materials critical for advanced technology manufacturing.

Tariff Reductions and Trade Commitments

The United States will reduce tariffs on goods related to fentanyl production from 20% to 10%. Trump stated China promised to work hard to stop the flow of fentanyl precursor chemicals.

Washington agreed to suspend a rule for one year that would expand trade restrictions to entities at least 50% owned by sanctioned companies. Other reciprocal tariffs on Chinese goods will also remain suspended for one year.

China agreed to resume buying large amounts of US soybeans starting immediately. Trump emphasized his belief that trade between the two countries would increase following this agreement.

The US will mediate discussions between Beijing and Nvidia CEO Jensen Huang. These talks will address China’s use of restricted computer chips.

Additional Trade Developments

Trump announced the US and South Korea reached a framework agreement after months of negotiations. He also signed deals with Japan’s Prime Minister Sanae Takaichi relating to trade and rare earth materials.

The US Senate passed a bill aiming to end Trump’s 50% tariffs on Brazil. Several members of Trump’s own party supported this rare rebuke of the president’s trade policy.

Trump threatened to raise tariffs on Canada by an additional 10% over a dispute involving a Ronald Reagan advertisement. He said he is stopping all negotiations with Canada.

Reports indicate the US and India are making progress on a trade deal. Tariffs on India could drop to 15-16% from the current 50% level.

The US Supreme Court will hear a challenge to Trump’s reciprocal tariffs in early November. Lower courts have previously ruled against these country-by-country duties.

The trade truce represents a pause in tensions that began when Trump increased trade threats against China after returning to office. Markets and investors have responded to months of uncertainty surrounding the US-China trade relationship.

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