Gyeongju, South Korea – The United States and China have stepped back from the brink of escalating their trade conflict, with leaders Donald Trump and Xi Jinping announcing a one-year agreement aimed at easing tensions.
Meeting on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit, the two presidents held their first direct talks since 2019. Trump described the discussions as “amazing,” saying both sides had reached “outstanding decisions” that would soon be formalized in a signed deal.
Under the arrangement, Washington will scale back certain tariffs, while Beijing will suspend its planned export controls on rare earth minerals — a sector where China dominates global supply. The move is expected to calm fears of supply chain disruptions in industries ranging from smartphones to defense technology.
Trump told reporters that the rare earths issue had been “settled,” adding that the minerals “will hopefully disappear from our vocabulary for a little while.”
China’s state media, however, struck a more cautious tone. According to Xinhua, Xi emphasized the importance of focusing on long-term cooperation rather than falling into cycles of retaliation.
The agreement also includes a U.S. decision to reduce a tariff linked to fentanyl imports from 20 percent to 10 percent, after Xi pledged to intensify efforts to curb the flow of the synthetic opioid. Other tariffs remain in place, leaving the average U.S. rate at about 47 percent, compared with China’s 32 percent on American goods.
Trade analysts noted that Beijing had long sought relief on the fentanyl-related tariff and used rare earths as leverage in negotiations. Shan Guo, a partner at Shanghai-based consultancy Hutong Research, said the partial cut was “expected” and would help Chinese exporters compete more effectively with rivals in Southeast Asia.
In addition, Trump said China had agreed to purchase large quantities of U.S. agricultural products, including soybeans, offering a boost to American farmers.
While the deal provides short-term stability, both sides acknowledged that deeper issues remain unresolved. For now, however, the truce marks a rare moment of cooperation in a relationship defined by rivalry.