Trump cuts tariffs on China after Xi meeting, to get rare earths in return

President Donald Trump described his face-to-face with Chinese leader Xi Jinping in South Korea on Thursday as a roaring success, saying he would cut tariffs on China, while Beijing had agreed to allow the export of rare earth elements and start buying American soybeans.

The President told reporters aboard Air Force One that the US would lower tariffs implemented earlier this year as punishment on China for its selling of chemicals used to make fentanyl from 20 per cent to 10 per cent. That brings the total combined tariff rate on China down from 57 per cent to 47 per cent.

“I guess on the scale from 0 to 10, with ten being the best, I would say the meeting was a 12,” Trump said, adding he would visit China in April and Xi would come to the US “some time after that”. The US President said they also discussed the export of more advanced computer chips to China, saying that Nvidia would be in talks with Chinese officials.

Trump said he could sign a trade deal with China “pretty soon”. “We do not have too many major stumbling blocks,” Trump said. China did not provide immediate comment on the meeting or any outcomes.

Despite Trump's optimism after a 100-minute meeting with Xi in South Korea, there continues to be the potential for major tensions between the world's two largest economies. Both nations are seeking dominant places in manufacturing, developing emerging technologies such as artificial intelligence and shaping world affairs like Russia's war in Ukraine.

Trump's aggressive use of tariffs since returning to the White House for a second term, combined with China's retaliatory limits on exports of rare earth elements, gave the meeting newfound urgency. There is a mutual recognition that neither side wants to risk blowing up the world economy in ways that could jeopardise their own country's fortunes.