The meeting between U.S. President Donald Trump and Chinese President Xi Jinping in Busan has been characterised by Trump as an “amazing” encounter and the beginning of a “fantastic new relationship” between the United States and China. The two-hour closed-door session culminated in several significant understandings, including a 10% reduction in tariffs—from 57% down to 47%—a resumption of Chinese soybean purchases from the United States, and an apparent settlement of the embargo on Chinese rare earth exports, one of the most contentious issues in recent U.S.–China trade relations.
One of the most consequential breakthroughs reported from the summit involved rare earth minerals, which are critical for manufacturing high-tech devices, electric vehicles, and defence systems. Trump announced that “all the rare earth issues have been settled” and that no further roadblocks would impede Chinese exports of these materials to the U.S. A U.S. official travelling with the president confirmed that Beijing had agreed to maintain a one-year arrangement for the flow of these exports, with the expectation that it may be extended. The agreement comes amid heightened supply-chain concerns in the U.S. tech and defence sectors regarding dependence on Chinese-dominated rare-earth processing.
Regarding tariffs, Trump described the 10% rollback as “a gesture of good faith” and hinted at a broader framework of cooperation with China. He claimed that China would immediately resume large orders of U.S. soybeans and other agricultural goods, declaring that “our farmers have a big win” after months of disrupted exports. The trade component reflects renewed optimism that the previously stalled agricultural link between the two nations may soon be revitalised.
The summit also addressed the pressing issue of fentanyl, which has been a major point of contention between the two countries. Trump announced that Xi had pledged to intensify efforts to counter the flow of fentanyl into the U.S. He noted that he had imposed a tariff because of the drug’s impact on American lives and said he reduced it as part of the deal. The move may signal a deeper strategic alignment on transnational crime cooperation, though implementation details remain scarce.
Trump reported that Taiwan did not come up during the talks, which was unexpected given its status as a pivotal flashpoint in U.S.–China geopolitics. He also announced his intention to visit China in April, with Xi set to reciprocate later this year, possibly in Florida or Washington. The planned visits underscore the thaw in direct Beijing–Washington engagement and suggest a shift in diplomatic priorities.
While the Busan summit has been hailed by both leaders as a hallmark convergence, analysts are cautious. They note that while the superficial agreements are significant, many details remain unverified, and metrics for implementation are unclear. The one-year term on the rare-earth arrangement suggests temporality rather than a durable resolution. The removal of tariff barriers does not automatically guarantee structural changes in trade, and the promise of renewed agricultural purchases faces logistical and political hurdles. That said, the meeting represents a strategic pivot in U.S.–China relations and may mark the beginning of a phase characterised by cautious accommodation rather than confrontation.
