Trump and Xi Meet to Ease Trade Tensions, Key Issues Addressed

President Donald Trump and Chinese leader Xi Jinping held a significant meeting on November 16, 2023, during the final leg of Trump’s three-country tour in Asia. The discussion aimed to address ongoing trade tensions between the United States and China, the world’s two largest economies. While a finalized agreement was not reached, both leaders expressed optimism about future negotiations. Trump described the meeting as “amazing” and rated it a “12” on a scale from zero to ten.

As the leaders departed Busan, South Korea, Trump announced that a deal could be signed “pretty soon” and noted that there were “not too many major stumbling blocks.” He also indicated plans for a visit to China in April 2024, with Xi expected to visit either Florida or Washington afterwards.

Key Takeaways from the Meeting

Several topics were on the agenda, with significant implications for trade and international relations.

Fentanyl was a critical issue. Trump revealed that he would lower tariffs on fentanyl imports from 20% to 10%, effective immediately. This change is expected to reduce the total effective tariff rate on Chinese imports from 57% to 47%. Trump expressed confidence that Xi would “work very hard” to curb the illegal flow of fentanyl precursors from China, which are often processed in Mexico and smuggled into the U.S. Despite U.S. officials claiming that China has not done enough to address the issue, China maintains that its anti-fentanyl measures are among the strongest globally.

Another significant point of discussion was rare earth materials, essential for various technologies, including electric vehicles. China has previously imposed strict export controls on these materials, but during the meeting, Xi agreed to a one-year reprieve on these restrictions, which may be extended in the future. A White House official confirmed that a mutual understanding was reached, and China would not impose the previously proposed controls.

Analysts caution that while the U.S. is striving to reduce its reliance on China for rare earth materials, achieving this goal will take time. Patrik Andersson, an analyst at the Swedish National China Centre, stated that building new mines and expanding processing capacity requires significant investment and years of effort.

Soybeans also featured prominently in the discussions. Trump announced that China had resumed purchases of U.S. soybeans, which had been halted for months. The cessation of purchases from China, the largest market for U.S. soybeans, has been a major concern for American farmers. Trump indicated that China would commit to buying “large, tremendous amounts” of soybeans and other agricultural products.

Other Topics and Future Cooperation

The ongoing conflict in Ukraine was another issue of concern. Trump stated that the U.S. and China would collaborate to seek a resolution to the war. He mentioned that Ukraine was discussed at length during their meeting and that both nations would aim to “get something done.”

Despite earlier expectations, Trump did not address the controversial app TikTok during the meeting. This omission is noteworthy given prior indications that a deal regarding the sale of TikTok’s U.S. operations was likely. Additionally, when questioned about Taiwan, Trump confirmed that the topic was not discussed at all.

Furthermore, no discussions took place regarding American tech giant Nvidia and its latest chips. Trump clarified that there was no conversation about easing export controls for Nvidia’s new Blackwell chips, although the U.S. currently permits limited exports of modified older GPU chips designed for the Chinese market.

This meeting marks a significant moment in U.S.-China relations, indicating a potential thaw in trade tensions. As both leaders move forward with future engagements, the outcomes of these discussions will likely shape the economic landscape for both nations.