Summary
Trump says tariffs on China cut to 47% from 57%
China agreed to keep rare earth exports flowing, Trump says
Both sides escalate trade threats for leverage ahead of talks
Summit in South Korea lasted nearly two hours
Reuters Live: Trump and Xi meet in South Korea
U.S. President Donald Trump said on Thursday he had agreed with President Xi Jinping to trim tariffs on China in exchange for Beijing cracking down on the illicit fentanyl trade, resuming U.S. soybean purchases and keeping rare earths exports flowing.
Trump’s face-to-face talks with Xi in the South Korean city of Busan, their first since 2019, marked the finale of the U.S. president’s whirlwind Asia trip on which he also touted trade breakthroughs with South Korea, Japan and Southeast Asian nations.
"I thought it was an amazing meeting," Trump told reporters aboard Air Force One shortly after he departed Busan, ranking the talks a "12 out of 10".
Trump said tariffs imposed on Chinese imports would be cut to 47% from 57% by halving the rate of tariffs related to trade in fentanyl precursor drugs to 10% from 20%.
Xi will work "very hard to stop the flow" of fentanyl, a deadly synthetic opioid that is the leading cause of American overdose deaths, Trump said. The tariff was reduced "because I believe they are really taking strong action," he added.
Trading in global stocks was choppy as Trump revealed details of the deal, with major Asian indexes and European futures swinging between gains and losses. China’s Shanghai Composite Index (.SSEC) slipped from a 10-year high, while U.S. soybean futures were weaker.
"At the moment, the price action makes things seem like a lot of this was already priced in," said Kyle Rodda, senior market analyst at Capital.com in Melbourne. "Arguably the markets were hoping for the complete removal of the fentanyl tariff, so that could explain the ambivalence in the markets."
Only India and Brazil are still subject to higher tariff rates among major U.S. trading partners.
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