Trump, Xi agree conditional one-year trade truce
By Josh White
Date: Thursday 30 Oct 2025
(Sharecast News) - The United States and China have agreed a one-year trade truce that pauses some of the most contentious measures in their economic stand-off, after US president Donald Trump and his Chinese counterpart Xi Jinping met in South Korea for their first face-to-face talks since 2019.
Trump said the two sides had reached what he called an "amazing" understanding that would see the US scale back some tariffs on Chinese imports and China suspend planned export controls on rare earth minerals.
He described the talks as a "great success" and said a formal deal would be signed "pretty soon".
Xi struck a more cautious tone, with Chinese state media saying only that both sides had reached a "consensus" on resolving major trade issues and should avoid a "vicious cycle of retaliation".
Under the arrangement, Washington would cut a tariff it had imposed in response to Chinese-origin fentanyl chemicals to 10% from 20%, and reduce overall tariffs on Chinese goods to about 47% from 57%, according to Trump.
He linked the move to what he said was Xi's pledge to "work very hard" to curb the flow of the synthetic opioid into the US.
Other US tariffs will remain in place.
China, in turn, pledged to resume large purchases of US agricultural products, including soybeans, after a lull in buying in recent months.
Beijing would also suspend for one year the export restrictions it had threatened on rare earths and other critical inputs for advanced technology manufacturing.
China has a dominant position in the processing of rare earth elements, which are essential for products ranging from smartphones to fighter jets, and its plans to tighten control of those supplies had alarmed global manufacturers.
Trump said the rare earths dispute was now "settled", adding that "there's no roadblock from China anymore", and called the outcome "for the world, not just the US".
He said the rare earths understanding would run for a year and then be renewed annually.
At the same time, China's commerce ministry said Washington had agreed to suspend for a year a planned expansion of US export restrictions on Chinese entities and their subsidiaries, and to pause recently-imposed measures targeting China's maritime, logistics and shipbuilding industries.
Beijing said it would suspend its own countermeasures against US-linked shipping for the same period.
Both governments presented these steps as hard-won and temporary, and said they would be reviewed each year.
The two leaders also addressed other points of friction.
Trump said US chipmaker Nvidia would hold talks with Chinese officials about supplying semiconductors, though he indicated that the most advanced systems remained off the table.
China said both sides had agreed to work together on issues including fentanyl enforcement, agricultural trade and "individual cases involving relevant companies", and to discuss how to resolve continuing disputes over Chinese-owned TikTok's operations in the US.
Trump said the US and China would also "work together" on the war in Ukraine.
The meeting did not touch on Taiwan, according to Trump, despite concerns in Washington and Taipei that he might be willing to offer concessions there in pursuit of an economic deal.
Trump also said the talks did not materially address China's energy ties with Russia.
Financial markets reacted nervously as partial details of the understanding emerged.
Asian equities and European futures swung between gains and losses, and Chinese shares edged lower from recent highs, reflecting both relief at a pause in escalation and uncertainty over how durable the truce will prove.
For both leaders, the optics were important.
Trump repeatedly praised Xi as a "great leader of a great country", rated the meeting a "12 out of 10", and announced plans to visit China in April, saying Xi would visit the US after that.
Xi, in more restrained public comments, said the two countries should "stay on the right course", treat trade as "ballast" in the relationship, and prevent US-China ties from drifting into open confrontation.
He said it was "normal" for the world's two biggest economies to have friction but argued they should deliver "tangible results" to reassure businesses and markets.
The outcome marked a pause in a confrontation that had intensified in recent weeks.
Beijing had threatened sweeping new controls on exports of rare earths and semiconductor-related materials.
Trump had meanwhile warned of 100% tariffs on Chinese goods and signalled further steps to restrict China's access to US-linked technology.
By agreeing to suspend those measures for a year, both sides had created space for negotiators to transform what Trump called an "outstanding group of decisions" into a more comprehensive agreement.
But the truce remained provisional.
Neither side declared a permanent settlement, and both framed the outcome as conditional on implementation.
Trump said the US and China had "not too many stumbling blocks", but acknowledged the deal would be revisited annually.
Xi told his team to "refine and finalise follow-up work as soon as possible" and warned against sliding back into tit-for-tat escalation.
Reporting by Josh White for Sharecast.com.
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