President Donald Trump and Chinese President Xi Jinping reached a one-year trade truce in South Korea on October 30, 2025, temporarily de-escalating a high-stakes dispute over critical rare earths export controls, tariffs, and maritime port fees between the world’s two largest economies.
The high-stakes encounter at Gimhae International Airport on the sidelines of the Asia-Pacific Economic Cooperation summit in Busan, South Korea, halted an escalating confrontation that had threatened to rupture global supply chains. China agreed to pause for one year the sweeping export controls on rare earth elements announced on October 9, which had triggered the latest diplomatic crisis.
Aboard Air Force One, President Trump told reporters that the agreement would endure well past its initial timeline. We have a deal,
Trump said. President Trump stated that while they would renegotiate the agreement annually, he believed it would endure for a long time, well past the one-year mark, adding that all rare earth matters had been settled globally. The president added that he plans to visit China in April, while Xi will travel to the United States for a future meeting in Washington, D.C., or Palm Beach, Florida.
Tariff Reductions and Structural Concessions
Alongside the rare earths pause, the agreement delivered immediate adjustments to import duties. Trump announced he cut tariffs on China related to fentanyl to 10% from 20%, bringing the overall rate on Chinese goods down to approximately 47%. The move averted threatened 100% levies that Washington had scheduled to impose on November 1.
Additional reciprocal steps accompanied the tariff rollback. According to a statement from China’s Ministry of Commerce, the U.S. will postpone a rule announced on September 29 that had placed majority-owned subsidiaries of Chinese companies on an entity list. Furthermore, both economic powers agreed to a one-year suspension of fees on commercial vessels docking at each other’s ports.
Supply Chain Leverage and Strategic Ambiguity
The summit underscored Beijing’s commanding position in advanced manufacturing inputs. The U.S. is dependent on China for rare earths, which are essential for permanent magnets utilized across defense systems, semiconductor fabrication, and electric vehicles.
Wolfe Research strategist Tobin Marcus told clients that China successfully used the rare earths export controls and a soybean embargo to force the U.S. to lower tariffs. Piper Sandler analysts echoed that assessment, writing that Xi was ready for Trump in his second term and has a powerful weapon in rare earths, concluding that China is getting the better of the US in these recent truce negotiations.
Veteran diplomats cautioned against viewing the agreement as a definitive settlement. Former U.S. Ambassador to China Nicholas Burns described the outcome during a broadcast appearance, stating that Where we are is an uneasy truce in a long, still simmering trade war.
Unresolved Commitments and Sector Discussions
Significant ambiguity remains regarding agricultural targets, energy purchases, and technology controls. While Trump asserted that Beijing committed to substantial agricultural buying, Treasury Secretary Scott Bessent confirmed in a separate interview that China will buy 25 million metric tons of soybeans annually over the next three years. However, China’s Ministry of Commerce issued a broad statement indicating the two sides would simply expand agricultural trade without detailing specific quotas.
Piper Sandler analyst Andy Laperriere noted that similar agricultural and anti-narcotics promises were made during Trump’s first administration, prompting skepticism over whether Washington secured genuine concessions. On energy, Trump noted potential discussions regarding Alaskan oil and gas purchases, though Energy Secretary Chris Wright and Interior Secretary Doug Burgum will meet with Chinese officials to determine if a binding transaction can be forged.
Technology exports also surfaced during travel discussions. Trump addressed semiconductor shipments with Xi, confirming that advanced Blackwell graphics processing units were excluded from talks and noting that I said that’s really between you and Nvidia, but we’re sort of the arbitrator. Additionally, China’s commerce ministry stated that Beijing will work alongside Washington to resolve issues related to TikTok, leaving the operational framework for future negotiations to unfold ahead of the planned spring presidential visits.