Trump and Xi Forge New Trade Agreements During South Korea Meeting

President Donald Trump and Chinese President Xi Jinping concluded a significant meeting in South Korea on March 7, 2024, where they announced agreements aimed at improving trade relations between the U.S. and China. The discussions included the resumption of U.S. soybean sales to China, tariffs on imports, and access to rare earth minerals, although no formal documents detailing these agreements have been released.

During a press briefing, Trump characterized the meeting as “amazing,” highlighting that it included the reduction of tariffs on Chinese goods by 10%. He mentioned that the current tariff rate of 57% would be lowered to 47%. Although the president expects to sign a trade agreement “pretty soon,” he acknowledged the possibility of future renegotiations. This movement towards a more cooperative trade environment comes as Trump aims to address the pressing issue of fentanyl production, which has long been a point of contention.

Trump stated that he would ease tariffs on China in response to a pledge from Beijing to work with the U.S. on combating the fentanyl crisis. China is known to be the largest exporter of precursor chemicals for fentanyl, which has contributed to a public health crisis in the United States. Despite the reduction, the anticipated 47% tariff rate would still represent one of the highest tariffs on Chinese imports.

In addition, Trump confirmed that the planned implementation of additional 100% tariffs on Chinese imports, previously set to take effect on November 1, has been halted. The details surrounding these trade adjustments have yet to be formally documented.

Key Agreements on Soybeans and Rare Earth Minerals

Another significant outcome of the meeting involves soybeans, a product that has seen strained trade due to Trump’s tariff policies. On social media platform Truth Social, Trump announced that Xi authorized the purchase of “massive amounts of soybeans” and other agricultural products from the U.S. Treasury Secretary Scott Bessent added that China has committed to returning to normal soybean purchasing levels over the next three years, with an agreement to acquire 12 million metric tons this season.

On the topic of rare earth minerals, Trump indicated that China would delay its recently announced export restrictions for a year, a delay he anticipates will be routinely extended. Rare earth elements are crucial for various technologies, including semiconductor chips and military applications, with China producing approximately 95% of the world’s supply, according to energy research firm Wood Mackenzie. Trump asserted, “We have a deal now,” suggesting that the rare earth issue has been resolved.

Unresolved Issues and Future Prospects

Despite the promising agreements, Trump did not provide updates on a finalized deal regarding the popular app TikTok, which has faced scrutiny due to its Chinese ownership. Bessent stated that they had received Chinese approval for a deal to transfer ownership away from ByteDance, the Chinese parent company. However, no formal announcements followed the meeting, and the timeline for resolution remains unclear.

On the technology front, Trump mentioned discussions about semiconductor chips, stressing that the decision for China to purchase U.S.-made chips would depend on negotiations between Chinese officials and companies like Nvidia. The U.S. has imposed restrictions on chip sales to China, citing national security concerns, particularly regarding their potential use in military applications.

As both leaders prepare for future negotiations, the outcomes of this meeting could lead to a recalibration of U.S.-China relations, particularly in trade and technology sectors. The ongoing dialogue may help ease tensions and foster a more stable economic environment between the two nations.