Trump reduces tariffs on China and Xi Jinping suspends restrictions on rare earths

Donald Trump, President of the United States, and Xi Jinping, President of China, met in South Korea, specifically at Gimhae Air Base in the South Korean port city of Busan, and held a very productive meeting lasting almost two hours.

Following this extremely important high-level meeting, it was announced that Donald Trump will reduce trade tariffs on China by 10% and that Xi Jinping will lift restrictions on rare earths in October, a market overwhelmingly dominated by the Asian giant.

The meeting between the two most powerful leaders in the world ended cordially and there was a significant de-escalation of political and trade tensions between the United States and China following their meeting in South Korea.

The United States and China announced several agreements, such as those mentioned above on tariffs, the lifting of restrictions on rare earths, the lifting of export restrictions and a rapprochement on highly relevant issues such as the war in Ukraine.

Tariffs were the key issue at the meeting between the two leaders, and with this reduction, both countries stand to gain. The United States has committed to lowering fentanyl tariffs from 20% to 10% in recognition of Beijing's cooperation in the fight against the fentanyl epidemic that is ravaging a significant portion of the US population, and the remaining tariffs from 57% to 47%.

China, for its part, will pause for one year the application of export control measures on rare earths and other strategic materials, adopted on 9 October. These are a group of minerals that are very important for the manufacture of strategic products in various basic industries and which China controls globally. Likewise, according to the US leader, both have discussed the sale of Nvidia chips to China, without reaching an agreement on the matter.

Donald Trump said that the meeting had been very important, with great harmony and impact. ‘I would say that, on a scale of 1 to 10, the meeting was a 12,’ Trump told reporters aboard Air Force One, on his return to Washington after the meeting at Gimhae Air Base and after the Republican president's tour of Asia.

Xi Jinping remained in South Korea to participate in the Asia-Pacific Economic Cooperation (APEC) forum in the nearby city of Gyeongju (31 October-1 November) and expressed his satisfaction with the significant rapprochement with Donald Trump. However, he urged the United States to avoid ‘falling into a vicious cycle of retaliation’ because China avoids challenging any country, according to the Chinese leader, as reported by the Chinese news agency Xinhua