President Trump announced on October 30th that the US would halve its fentanyl-related tariffs on Chinese goods as part of a reset in relations that includes China stepping back from its promise to restrict rare earth mineral exports for a year.

Other parts of the limited agreement Trump outlined after a summit with Chinese President Xi Jinping in South Korea include increased purchases of US soybeans, more actions from China on the issue of fentanyl, the suspension of some shipping fees, an easing of the US’s “50 Percent” export control rules that apply to foreign nationals subject to US sanctions, and a visit by Trump to China now penciled in for next April.

Trump promised that additional details would be forthcoming and told reporters on Thursday that it had been a highly productive meeting, adding that a formal deal would be signed “pretty soon.”

The terms outlined are likely to provide markets with a measure of stability in the relationship between the world’s two largest economies, at least until next year.

“The de-escalation takes the immediate threat of large tariff hikes off the table, removing a key downside risk to the near-term outlook,” Capital Economics noted in an analysis Thursday, adding that underlying issues remain unresolved and, as such, “both sides will continue to pursue wider decoupling efforts.”

The summit in Busan was the first face-to-face meeting between the two leaders of Trump’s second term and lasted a little under two hours.

A clear headline for markets was the tariff reduction, with Trump announcing that he would cut the current 20% tariff on China imposed over fentanyl to 10% “effective immediately.”

The US has imposed a wide array of tariffs on China, from those 20% fentanyl-specific duties to 34% “reciprocal” tariffs to other sector-specific duties. The Peterson Institute for International Economics estimates that the average US tariffs on Chinese exports stood at 57.6% before the meeting.

Trump said the changes mean the new overall rate is about 47%.

Also, key was the issue of rare earth minerals. By some estimates, China controls 90% of the world market for processing these precious metals that are crucial to modern electronics.

China rattled global markets recently by announcing plans to restrict their exports. As part of Thursday’s agreement, “they’re going to keep those flowing” for at least a year, said Trump trade representative Jamieson Greer.

China’s Commerce Ministry on Thursday confirmed some of the terms, such as the lowering of fentanyl tariffs. Chinese state media offered a few additional details and struck an optimistic tone, saying the meeting would allow the two sides to build a “solid foundation for bilateral ties.”

Not apparently agreed to in the talks was the closely watched market issue of semiconductors. Trump promised only that China and Nvidia (NVDA) would later talk among themselves about the chipmaker’s future access to the country.

“They’re going to be discussing that with Nvidia to see whether or not they can do it,” Trump said of China, describing his role as that of the “referee” but downplaying the chances of more advanced Blackwell chips being available anytime soon, saying, “We’re not talking about the Blackwell.”

Also not finalized is TikTok. China’s Commerce Ministry said work to finalize the deal to spin off the app’s US business and keep it available for Americans will continue.

There appeared to be little progress on China’s relationship with Russia and its role in the war in Ukraine. Trump said he and Xi agreed to “work together” on the issue, but added that “there’s not a lot more we can do,” given China’s long history of purchasing Russian oil.

Also, according to Trump, “Taiwan never came up.”

Other issues saw more immediate attention, with Agriculture Secretary Brooke Rollins confirming even before the meeting that China had renewed purchases of “multiple ships of American soybeans.”

That was a top item on Trump’s agenda after China recently stopped purchases altogether, hurting the bottom lines of US soybean farmers to the point that it was a situation described by some as a “Farmageddon.”

Treasury Secretary Scott Bessent added on Fox Business Thursday morning that China is promising to purchase 12 million metric tons of soybeans this season — which, for context, is about 10% of America’s annual crop — and 25 million metric tons next season.

On social media, Trump teased what he said could be new energy purchases from China, saying that “a very large scale transaction may take place” around purchasing oil and gas from Alaska.

“Progress in US-China trade talks today marks an undeniably positive step,” noted Louise Loo, head of Asia Economics at Oxford Economics, and “sets the stage for deeper, more predictable engagement heading into 2026.”

But she was quick to note that “the détente is fragile given the high risk of policy missteps and mutual misreadings.”

The larger takeaway from the gathering with China — which capped off an Asian swing that took President Trump from Malaysia to Japan to South Korea and also saw the president threaten minutes before meeting with Xi to resume US nuclear testing for the first time in decades — was some stability in the relationship.

“We have a deal,” Trump declared Thursday, before offering a reminder that “every year we’ll renegotiate the deal.”

Specific details:

Key Chinese Commitments

China has agreed to lift or suspend a wide range of export controls and retaliatory measures that have disrupted trade flows since 2022. Of particular importance:

• Rare Earths & Critical Minerals: China will suspend its recently announced export controls and issue general licenses for rare earths, gallium, germanium, antimony, and graphite. This move effectively removes the bottlenecks affecting U.S. manufacturers in the electronics, automotive, and defense sectors.
• Agricultural Retaliation: All retaliatory tariffs and non-tariff barriers imposed since March 2025 will be lifted. This should reopen China’s market to U.S. soybeans, sorghum, hardwood logs, and other commodities.
• Semiconductors & Industrial Goods: China will end retaliatory measures against U.S. semiconductor companies and allow production at key facilities to resume normal export operations.

U.S. Actions and Tariff Adjustments

From the U.S. side, several tariff and regulatory changes are on the horizon:

• Tariff Reductions: The U.S. will lower certain China-fentanyl related tariffs (by 10 percentage points) beginning November 10, 2025, and suspend implementation of additional reciprocal tariffs through November 2026.
• Section 301 Exclusions: Current tariff exclusions, scheduled to expire on November 29, 2025, will be extended until November 10, 2026.
• Export Control Pauses: The U.S. will suspend for one year the implementation of new end-user control rules and Section 301 actions tied to China’s maritime and shipbuilding sectors.

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