President Trump and Chinese President Xi Jinping met in South Korea and agreed to lower trade tensions between the U.S. and China.
The U.S. will cut certain tariffs tied to fentanyl-related goods to 10%, while China pledged to take stronger action against the export of fentanyl precursor chemicals. China also agreed to purchase 12 million metric tons of U.S. soybeans this season and 25 million tons annually for the next three years, while easing rare-earth export restrictions for one year. In exchange, the U.S. will pause its new “50% rule,” which would have expanded sanctions on Chinese companies linked to blacklisted firms.
Key Points
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Tariffs: U.S. cut tariffs on fentanyl-related imports to 10%, lowering the average Chinese product tariff to ~47% from around 57%.
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Fentanyl: China vowed to crack down on precursor chemicals used to produce fentanyl.
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Soybeans: China will buy 12 M metric tons of U.S. soybeans this season and 25 M tons annually for three years.
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Rare Earths: China to ease restrictions on rare-earth exports for one year.
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50% Rule: U.S. will suspend implementation of the rule expanding blacklists of Chinese firms for one year.
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Follow-up: FBI Director Kash Patel to visit Beijing for further talks on fentanyl enforcement
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The TikTok deal is still not done
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Trump said that he did not specifically discuss Nvidia’s “Blackwell” chip with Xi .
Although Trump characterized his trip and meetings a 12 out of 10, the gains are still limited. At least the threat of 155% tariffs is now off the table and the 20% add on tariff from Fentanyl has lowered to by 10% (lowering the tariff number to around 47% total now), will China do what it promised for rare earths and US farm products? That is the hope, but it remains more of a hope vs actrual reality.
This article was written by Greg Michalowski at investinglive.com.