Trump
Hails ‘Lasting’ Trade Deal with Xi, Teases Further Tariff Cuts
Agreement pauses rare earth restrictions
and lowers some levies, but analysts warn key disputes remain unresolved
U.S. President Donald Trump on Friday (31.10.2025)
celebrated a new U.S.-China trade agreement reached during his meeting
with Chinese President Xi Jinping in Busan, South Korea, calling
it “long-lasting” and a “wonderful” breakthrough — though experts warned that
core tensions remain unresolved.
The deal — the first major accord since Trump’s
return to the White House — includes:
·
China’s pledge to buy at least 25 million
tons of U.S. soybeans annually for three years, along with sorghum and
other farm goods.
·
A one-year pause on Chinese rare earth export
restrictions, crucial for U.S. technology and defense
industries.
·
A reduction in U.S. tariffs on Chinese goods
tied to fentanyl control, lowering certain duties from 20% to 10%.
·
A suspension of planned U.S. tariffs on rare
earths (effective Nov 1) and reciprocal Chinese duties (effective Nov 10).
Trump suggested more tariff relief could follow if
Beijing curbs illicit fentanyl flows, calling it an incentive-based strategy.
He framed the deal as proof of his “strong relationship” with Xi, crediting
personal diplomacy for success.
However, analysts cautioned that the pact lacks
written details and leaves unresolved issues such as enforcement,
semiconductor exports, and technology access.
·
Michael Hirson (22V Research) noted
both sides continue seeking to reduce dependence on each other, especially in rare
earths and semiconductors.
·
Wendy Cutler (Asia Society Policy Institute) said
Beijing’s one-year pause “keeps leverage” over Washington.
·
The USTR confirmed that a Section 301
investigation remains active, meaning tariffs could be reimposed if China
fails to comply.
Unsettled topics included the TikTok ownership
transfer and possible easing of U.S. chip export restrictions, which
drew pushback from U.S. national security officials wary of ceding
technological advantage.
While the agreement cools trade tensions and boosts
U.S. farm exports, experts warned it remains a fragile truce, with
“structural fault lines” in the U.S.-China rivalry still intact.
Just
back from his whirlwind Asia tour, US President Donald Trump on Friday hailed a
newly negotiated trade deal with China as a “long-lasting” victory even as he teased
the possibility of more tariff concessions.
Aboard
Air Force One en route to his Palm Beach, Florida, resort,
Trump painted the Busan, South Korea, summit with Chinese President Xi Jinping on
Thursday as a blockbuster for US agriculture, especially soybeans, and dangled the
prospect of stronger trade ties.
“The
deal with China is going to be wonderful. It’s going to be long lasting,” Trump
said, crediting his personal rapport with Xi for the success. “I got along with
President Xi very well … The meeting with China was incredible.”
Despite
Trump’s chest-thumping, analysts said there are serious questions about the agreement
that leave ample room for misunderstanding, misinterpretation and a slide into another
downward spiral and do not address some of the most significant irritants in the
US-China relationship.
“The
rivalry’s structural fault lines remain intact,” said Han Lin, Shanghai-based China
managing director with the Asia Group. “Unsurprisingly, both leaders are playing
to their bases, not building lasting peace.”
Thursday’s
pact, building on a framework announced earlier in the week, averts a threatened
escalation in the trade war and secures a pledge by China to buy at least 25 million
tons (22.68 million metric tonnes) of US soybeans annually for the next three years,
along with sorghum and other farm products.
Trump
has boasted that the deals made in Asia are bringing in “over US$3 trillion really,
in profit”, telling farmers to “go out and buy larger tractors and more land” in
anticipation of the windfall.
After
reaching a 15-month high on trade-deal optimism a day earlier, soybean futures slipped
Wednesday as US farmers took profits from the previous session’s rally.
The
agreement also tackles Beijing’s rare earth export curbs, crucial for US tech and
defence. China has agreed to pause these restrictions for a year, with Trump hinting
on Thursday that the truce could be “very routinely extended”.
In
return, the US cut fentanyl-related tariffs on Chinese imports from 20 per cent
to 10 per cent, framing it as an incentive for Beijing to curb illicit opioid production.
“I’ve
given China great incentives to hold down the fentanyl, get rid of it,” Trump said
on Friday, noting its medical uses while blasting its illicit trade.
“I
really believe that they have an incentive,” he added. “I’d love to get rid of the
extra 10 per cent.”
The
president’s apparent willingness to make more concessions, at least for now, marks
a pivot from his tariff-heavy strategy.
Trump
insisted the deal’s strength lies in the personal rapport between top leaders –
and his own intelligence.
“I
think for a long period of time, we have a smart president. We have a great relationship.
If we don’t have a smart president – which is also a very strong possibility – then
we won’t have a great relationship,” he said.
But
analysts outlined several areas of potential concern about the US-China deal, including
the lack of any detailed written account of its terms.
While
China has pledged to “work very hard” at stemming the flow of fentanyl ingredients,
in Trump’s words, no specifics have been disclosed involving what China might do
beyond what it has already.
This
is hugely consequential given that Beijing’s evident pledge on fentanyl is the basis
for a 10 percentage point reduction in overall US tariffs
on Chinese goods – to 47 per cent from 57 per cent.
The
deal also suspended US tariffs on Chinese imports set to hit November 1 for rare
earth minerals and November 10 for “reciprocal” tariffs. Unclear, however, is how
long the pause will last, whether it extends for 90 days as Trump has done repeatedly
in the past, or has a longer tenure.
The
two sides also appeared to have a different take on what was agreed to regarding
China’s rare earth export restrictions, essential for US hi-tech manufacturing of
everything from food processors to military jets.
“Both sides are seeking to reduce their dependence
on the other, and extend the other party’s dependence,” said Michael Hirson, practice
head at 22V Research and a former financial attaché with the US embassy in Beijing.
“This
tussle is particularly intense in rare earths and semiconductors.”
While
Trump said the “rare earth issue has been settled”, Beijing has focused on the pause’s
one-year time frame, highlighting the continued leverage it holds over the US.
“It’s
welcome news that Beijing agreed to hold off implementing its recently announced
sweeping rare earth export restrictions, but we should expect Beijing to use this
threat as a hammer over the US’ head,” said Wendy Cutler, senior vice-president
at the Asia Society Policy Institute.
“Trump
has met his match with China, which has shown that two can play at this game,” added
the former deputy US trade negotiator.
Indeed,
both sides have kept their trade ammunition handy, underscoring the lack of trust
and the highly delicate nature of the truce.
Trump
could quickly raise tariffs again if he believes China is not complying with the
terms of Thursday’s deal.
US
Trade Representative Jamieson Greer said hours after the agreement was announced
that a Section 301 investigation into China’s compliance – with provisions for additional
tariffs – remains in place.
Somewhat
surprising, some analysts said, was the lack of a deal in South Korea on an “ownership
transfer” of the short video platform TikTok, which had been teed up as a likely
deliverable, indicating there may be more problems hammering out terms than suggested.
Elsewhere,
Trump wrote on social media that China committed to buying energy products. Yet
this was not mentioned in the Chinese readouts.
Also
unclear was whether Trump promised Beijing it would ease export restrictions on
high-end US semiconductors, a move that many in US national security circles believe
would cede a key US technological advantage to America’s primary rival.
“His
potential willingness to allow Nvidia to sell the B30A – a chip designed for China’s
market and substantially more advanced than the H20 chip that Beijing has disdained
– aroused a sharp reaction … in US policy circles, especially among China hawks,”
Hirson said.