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Three-digit tariffs are off the table, but import duties on each other are higher than in January.
Rare earth materials will flow more smoothly, but China has implemented an export authorization regime that can be tightened or loosened as required.
Port fees will be abolished, but only for one year.
And Beijing After suddenly breaking contact with American farmers, the government is again buying American soybeans.
After months of posturing, debate and threats, US President donald trump and Chinese leaders Xi Jinping Essentially the clock has been turned back. While the meeting between the two leaders was hailed by Trump as a “resounding success”, the agreement it resulted from could serve to undo some of the damage Trump has done from his trade war when he returns to the White House.
“It’s hard to see how the U.S. has made big gains in bilateral relations compared to where things were before Trump took office,” said Cornell University economist Ishwar Prasad.
On the Senate floor, the minority leader chuck schumer South Korea on Thursday condemned the deal to leave the United States, calling it “no better situation.”
“If anything, things are worse: Prices have gone up and China has not agreed to anything that will improve trade between our countries,” the Democratic senator said. He said Trump “started a trade war, created a huge mess for businesses, consumers and soybean farmers, and then celebrates for trying to clean up the mess he created in the first place.”
Still, the deal has brought some stability, giving the world’s two largest economies – as well as the rest of the world – time and room to readjust.
Washington and Beijing still need to finalize their agreements, a process that always leaves the potential for new disputes. But for now, Xi seems interested in moving on from the latest tensions.
In an official statement, Xi noted “recent ups and downs” which “offered some lessons for both sides.” He said they should “focus on the benefits of cooperation rather than falling into the vicious circle of mutual retaliation.”
Both sides reduce tariffs, resume soybean sales to China
Trump fired the first shot in the trade war in February when he imposed an additional 10% tariff on Chinese goods over allegations that Beijing had failed to stem the flow of chemicals used to make fentanyl. It rose as much as 145% after China retaliated, but pulled it back after Trump pulled the plug on the market.
In May both sides reduced their major tariffs on each other to 10%, while Washington retained a 20% fentanyl-related tariff, and China retained retaliatory tariffs of 10% or 15% on U.S. agricultural goods.
Now, Trump says he has lifted the 10% fentanyl tariff in exchange for Beijing’s cooperation in fighting the illegal drug.
US Agriculture Secretary Brooke Rollins said China would also withdraw retaliatory tariffs on US agricultural products. A Chinese commerce ministry spokesman said Beijing would “adjust its countermeasures accordingly”, without giving details.
Additionally, China has agreed to buy 12 million metric tons of U.S. beans by January, and at least 25 million metric tons annually for the next three years, Treasury Secretary Scott Besant said Thursday on Fox Business Network’s Mornings with Maria.
That compares with China buying 17 million metric tons of U.S. soybeans in the first eight months of this year, but importing zero in September. According to state media, China will buy 22 million metric tons of US soybeans in 2024.
Although China did not confirm details of the latest soybean deal, a Chinese commerce ministry spokesman said the two sides had reached a “consensus” to expand agricultural trade.
One-year ceasefire on export controls and port duties
In April, China used its monopoly power in the processing of critical minerals to establish a permit requirement for the export of many rare earth elements. On October 9, Beijing expanded export rules, apparently in response to a US decision to increase export controls on businesses linked to already blacklisted foreign companies.
Enraged, Trump threatened to impose new 100% tariffs on China, but both sides managed to calm down when Trump met Xi in South Korea.
Beijing said on Thursday it would pause rare earth export rules for a year from October to “conduct research to refine specific plans”, while the US would suspend its associated rule for a year.
Wade Santee, president of American permanent magnet company AML, said the delay by Beijing “provides ample time for the United States to accelerate investments in capabilities and innovation for rare earths and permanent magnets.” “This needs to be done at a rapid pace and at a scale never seen before in a post-COVID-19 response,” he said.
Another fresh problem was the US’s introduction of port tariffs targeting ships linked to China in October, as part of a plan to restore US shipbuilding capabilities. Beijing responded with retaliatory measures against America
The Chinese Commerce Ministry said that port duties on each other will not be removed but will be suspended for a year.
The future is still uncertain
Whether Trump accepts a return to the status quo or insists on addressing the fundamental issues that have persisted between the US and China for years is unclear. Nothing about Thursday’s meeting – the first between Trump and Xi in six years – touched on the Chinese manufacturing dominance that Trump has blamed for the loss of American blue-collar jobs.
Sean Stein, chairman of the US-China Business Council, called the latest developments “very encouraging” and said: “We hope that future negotiations will remove long-standing market access barriers, help level the playing field for US companies and bring long-term stability to the bilateral trade relationship.”
There are more opportunities on the horizon to continue working on these challenges. Trump said that he will visit China in April and after that Xi will visit America.
If Trump is not successful, this period may be remembered for much sound and fury, but there will be no change in the basic trajectory of China’s growing economy.
“Typically, Trump tends to be impatient for anything beyond the immediate, and it is the Chinese who play for long-term gain,” said Kurt Campbell, a former deputy secretary of state in the Biden administration and now chairman of The Asia Group.
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Tang and Wiseman reported from Washington. Josh Funk in Omaha, Neb. contributed reporting