United States (U.S.) President Donald Trump said on Thursday that he reached an agreement with President Xi Jinping to reduce tariffs on China in exchange for Beijing curbing illegal fentanyl trade, continuing purchases of U.S. soybeans, and maintaining exports of rare metals.
Trump’s personal talks with Xi in the South Korean city of Busan, the first since 2019, marked the finale of the U.S. president’s trip through Asia, during which he also praised trade breakthroughs with South Korea, Japan, and Southeast Asian countries.
“I think the meeting was incredible,” Trump told reporters on Air Force One shortly after leaving Busan, rating the talks “12 out of 10.”
Trump said that tariffs imposed on Chinese imports would be reduced from 57% to 47%, halving the tariff rate on trade in fentanyl precursors from 20% to 10%.
Xi will “work very hard to stop the flow” of fentanyl, the deadly synthetic opioid that is the leading cause of overdose deaths in the U.S., Trump said. The tariff was reduced “because I believe they are really taking strong action,” he added.
Global stock trading was volatile as Trump revealed details of the agreement, with major Asian indices and European futures oscillating between gains and losses. The Shanghai Composite Index (.SSEC) fell from a 10-year high, while U.S. soybean futures were weaker.
“Right now, price movements give the impression that much of it is already priced in,” said Kyle Roda, senior market analyst at Capital.com in Melbourne.
“It’s possible that markets were hoping for a full removal of the fentanyl tariffs, which could explain the ambivalence in the markets,” he said.
Only India and Brazil remain subject to higher tariff rates among the main U.S. trading partners.
