US President Donald Trump said Thursday that he had agreed with President Xi Jinping to cut tariffs on China in exchange for Beijing cracking down on illegal fentanyl trade, resuming purchases of U.S. soybeans, and maintaining the flow of rare earth metal exports.

Trump's face-to-face talks with Xi in the South Korean city of Busan, his first since 2019, marked the end of his brief trip to Asia, during which he also praised trade breakthroughs with South Korea, Japan, and Southeast Asian nations.

"It was an extraordinary meeting," Trump told reporters aboard Air Force One shortly after he left Busan, giving the talks a "12 out of 10."

Trump said tariffs on Chinese imports would be cut to 47% from 57%, while tariffs related to the trade in fentanyl precursor drugs would be halved to 10%.

Xi would work "very hard to stop the flow" of fentanyl, a deadly synthetic opioid that is a leading cause of overdose deaths in America, Trump said. The tariffs were reduced "because I believe they are truly taking decisive action," he added.

China agreed to temporarily suspend export controls announced this month on rare earth metals, elements vital to cars, aircraft, and weapons that have become Beijing's strongest bargaining chip in its trade war with the United States.

The temporary suspension will last for one year, China's Ministry of Commerce said in a statement, adding that the two sides had also reached consensus on cooperation on fentanyl and expanding agricultural trade. Global stock markets reacted to the detente with limited activity, with major Asian indexes and European futures fluctuating between gains and losses.

China's Shanghai Composite Index fell from a 10-year high, while U.S. soybean futures weakened. "The market response has been cautious, in contrast to Trump's enthusiastic characterization of the meeting," said Besa Deda, chief economist at advisory firm William Buck in Sydney.

Among the U.S.'s major trading partners, only Brazil and India remain subject to higher tariffs. Ahead of the meeting, global stock markets, from Wall Street to Tokyo, reached record highs amid hopes of a breakthrough in the trade war between the world's two largest economies that has disrupted supply chains and shaken global business confidence.

The heated meeting on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit lasted more than an hour and a half. Trump repeatedly raised the prospect of reaching a deal with Xi since US negotiators said Sunday they had agreed on a framework with China to avoid 100% US tariffs on its goods and suspend restrictions on Chinese exports of rare earth metals, a sector it dominates.

FRICTION IS NORMAL AT TIMES

It's normal for superpowers to have occasional friction, Xi told Trump through an interpreter, as talks began at a South Korean air base.

"China's development and rejuvenation do not conflict with President Trump's goal of 'Make America Great Again,'" Xi said. In addition to cutting fentanyl tariffs, Beijing has sought a relaxation of export controls on sensitive US technology and a reduction in new US port fees for Chinese vessels designed to counter China's global dominance in shipbuilding, maritime transport, and logistics.

Trump did not directly comment on the US concessions, but said China would buy "significant amounts" of US soybeans and other agricultural products "starting immediately." Before the summit, China purchased its first cargo of US soybeans in months, Reuters reported exclusively on Wednesday.

The White House has signaled its hope that this summit will be the first of several summits between the two leaders in the coming year. Trump said he would travel to China in April before hosting Xi in the United States. (alg)

Source: Reuters