Trump Concludes 'Amazing' Meeting With Xi Jinping, Teases 'Pretty Soon' Trade Deal
News Summary
US President Donald Trump and Chinese President Xi Jinping concluded a highly anticipated meeting on the sidelines of the APEC summit in Busan, South Korea, making significant decisions on trade, soybeans, and resources. This was their first in-person meeting since Trump's second term began, lasting approximately 1 hour and 40 minutes. Trump announced a reduction in fentanyl tariffs from 20% to 10%, lowering the levy on Chinese exports from 57% to 47%. In return, Beijing pledged to step up measures against fentanyl trafficking and restart imports of "tremendous amounts" of U.S. soybeans and other agricultural goods. An agreement on rare earths and critical minerals was also reached, which Trump stated would be renegotiated annually. Regarding Nvidia chip sales to China, Trump confirmed discussions with President Xi, but clarified that the sale of Nvidia's latest Blackwell chips was not included. When asked about signing a trade deal, Trump replied "pretty soon," adding there were "not too many major stumbling blocks." He also announced plans to visit China in April. Trump rated the meeting a "12 out of 10," calling it "amazing." Geopolitical issues, including Ukraine, were discussed extensively, though Taiwan was not. Xi Jinping reportedly stated that China's growth aligns with Trump's vision to "Make America Great Again," emphasizing that China and the U.S. should be partners and friends and expressed readiness to build a solid foundation for bilateral relations.
Background
President Donald J. Trump was re-elected in November 2024, with his second term commencing in January 2025. During his first term, the U.S. and China engaged in a protracted and impactful trade war, which significantly affected global economies and supply chains. Despite the signing of a Phase One trade deal, tariffs and technological restrictions remained prominent issues in bilateral relations. Fentanyl has been a sensitive issue in U.S.-China relations, with the U.S. consistently urging China to intensify efforts against fentanyl trafficking. Concurrently, U.S. agricultural exports, particularly soybeans, have often been targets of China's retaliatory trade measures. China's dominant position in rare earths and critical minerals has also been a strategic concern for the U.S. and its allies. Furthermore, the U.S. has been restricting the sale of advanced semiconductor technology to China via export controls to curb China's advancements in AI and military capabilities, impacting companies like Nvidia.
In-Depth AI Insights
What do the selective tariff reductions and commodity deals in this meeting signify for the national strategies of the U.S. and China, respectively? The agreement reflects a pragmatic, limited, and transactional de-escalation in specific areas, rather than a comprehensive strategic realignment. For the U.S., the reduction in fentanyl tariffs might be a bargaining chip to secure increased Chinese anti-drug cooperation and agricultural purchases, addressing domestic social issues and supporting agricultural states. For China, resuming soybean and agricultural imports helps stabilize domestic supply and prices, while the rare earths agreement likely aims to ensure global supply chain stability within a specific framework, potentially averting harsher restrictions. How does the explicit exclusion of Blackwell chips from Nvidia's sales discussions reflect the core strategies in the U.S.-China tech rivalry? - This demonstrates the U.S.'s unwavering commitment to maintaining its absolute technological superiority, particularly in critical AI chip sectors. - Allowing sales of non-Blackwell chips likely acknowledges market demand while managing competition by restricting access to the most advanced technology, rather than pursuing complete decoupling. - This strategy attempts to balance economic interests (Nvidia can still sell some products to China) with national security (preventing China from acquiring next-gen military/AI tech), but will undoubtedly accelerate China's push for indigenous advanced chip development. Do the prospects of a "pretty soon" trade deal and future reciprocal visits signal long-term stability for investors, or merely a temporary strategic détente? - Given the Trump administration's consistent transactional foreign policy, the "pretty soon" trade deal is more likely a strategic détente aimed at resolving immediate economic and political pressures, rather than fundamentally altering the deep structural conflicts in bilateral relations. - The planned reciprocal visits suggest both sides desire to maintain high-level communication and prevent a downward spiral in relations, offering some short-term certainty to the market. - However, the scope and enforcement details of any trade deal remain crucial, and unresolved structural issues (e.g., intellectual property, state-owned enterprise subsidies, technological dominance) suggest future frictions are still probable, cautioning investors about the fragility of this apparent calm.