Trump-Xi meeting yields rare earth deal and tariff relief
After nearly a two‑hour meeting in Busan (South Korea), Donald Trump announced a “breakthrough” in trade talks with China’s President Xi Jinping.
The headline outcome is a provisional one‑year arrangement on China’s exports of rare-earth metals. According to Trump, the issue is “settled” for the next 12 months, reducing the risk of supply disruptions for the aviation, automotive and defense industries.
Beyond rare earths, the sides agreed on a set of steps to de-escalate the tariff war. The White House says the US will partially reduce duties on a range of Chinese goods and trim tariffs related to components in the fentanyl supply chain to 10% if China curbs precursor exports.
China, for its part, is (according to Donald Trump) ready to restart large‑scale purchases of US soybeans. The precise tariff lines and volumes affected remain unclear, as Beijing has not yet published an official list of concessions agreed at the meeting.
Markets reacted mixed. Asian indexes swung on the lack of detail: the MSCI Asia‑Pacific edged lower, while Japan’s Nikkei fell after the Bank of Japan kept rates unchanged but hinted at possible tightening in December. In commodities, gold ticked higher on safe‑haven demand, while oil drifted modestly lower.
Crypto markets are also trending lower at the time of writing: over the past 24 hours, Bitcoin is down 2.27% to $110,740, while Ethereum dropped 2.30% to $3,925.
Politically, the new understandings aim to ease tensions on several fronts: from high reciprocal tariffs to sensitive disputes over technology and drug-trafficking controls. Yet the one-year limit on the rare-earth arrangement highlights that neither side is declaring an end to the trade war, as both are keeping leverage for future bargaining. Washington insists the deal will have a global stabilizing effect on supply chains, while Chinese officials have so far avoided public confirmation.
In the days ahead, markets and policymakers will watch for the release of the legally binding details and for signs of resumed soybean purchases. The durability of the Busan “breakthrough”, whether it becomes a lasting truce in the trade war or merely a pause before the next round of geopolitical sparring, will depend on the specificity of the commitments and the strength of their enforcement mechanisms.
