Trump and Xi Finalize Major Trade Agreement, Easing Tensions

The White House announced a significant trade agreement between President Donald Trump and Chinese President Xi Jinping following their bilateral meeting in Busan, South Korea on October 30, 2025. This agreement, characterized by the administration as a “historic” accomplishment, aims to alleviate ongoing tensions between the two largest economies in the world.

The deal encompasses reductions in U.S. tariffs and a range of commitments from China. According to the White House, the agreement is designed to “safeguard U.S. economic strength and national security while putting American workers, farmers, and families first.”

Under the terms of this agreement, China has committed to several key actions. Most notably, it will curb the flow of fentanyl precursor chemicals into the United States. Additionally, China has agreed to suspend new export controls on rare earth elements and magnets. The country will also reopen its markets to U.S. soybeans and other agricultural products, lifting retaliatory measures against major U.S. companies.

Key commitments from China include:

– Suspending new export controls on rare earths announced on October 9.
– Issuing general licenses for exports of rare earths, gallium, germanium, antimony, and graphite.
– Taking “significant measures” to control the flow of fentanyl into the U.S.
– Suspending all retaliatory tariffs imposed since March, which include tariffs on U.S. agricultural products such as soybeans, pork, corn, and dairy.
– Removing non-tariff countermeasures targeting U.S. industries.
– Purchasing 12 million metric tons of U.S. soybeans by the end of the year and committing to 25 million tons annually through 2028.
– Resuming imports of U.S. sorghum and hardwood logs.
– Lifting sanctions imposed in response to U.S. investigations into China’s maritime, logistics, and shipbuilding sectors.

In exchange, the U.S. has agreed to reduce tariffs on Chinese imports—initially imposed to limit fentanyl flows—by 10 percentage points starting on November 10, 2025. The U.S. will also extend certain Section 301 tariff exclusions through November 10, 2026 and delay enforcement of a new export rule targeting affiliates of blacklisted Chinese firms until the same date.

The White House has expressed that this agreement is part of a series of “historic wins for the American people.” Trump’s visit to Asia also yielded new trade agreements with Malaysia and Cambodia and established frameworks for negotiations with Thailand and Vietnam. Furthermore, the trip resulted in expanded investment commitments from Japan and South Korea.

“This trade and economic deal caps President Trump’s successful trip to Asia, where he delivered a series of historic wins for the American people,” a White House statement noted.

This agreement marks a crucial step in reshaping trade relations in the Asia-Pacific region and could have lasting implications for global commerce. As both nations work towards implementing the terms of this agreement, the international business community will be closely monitoring its effects on market dynamics and economic stability.