Updates: Trump, Xi reach deal on tariffs, rare earths

The day began with niceties between US President Donald Trump and his Chinese counterpart Xi Jinping, and ended with what appears to be the framework for a trade deal.

With the US agreeing to cut down its tariff rate against Chinese goods, and China agreeing not to impose new export restrictions on rare earth minerals, experts say there’s a pathway for the world’s two largest economies to steady their tense relationship.

Read more here on what happened and what it all means.

This live page will be closing soon. Here are the day’s major developments:

• • US President Donald Trump and Chinese President Xi Jinping agreed to avoid escalation in their trade war in a summit held on the sidelines of the APEC summit in South Korea, their first meeting since 2019.
  • Under the deal, Trump agreed to lower his fentanyl tariff from 20 percent to 10 percent and not impose higher baseline duties in exchange for Beijing deferring export controls on its rare earths and increasing purchases of American soya beans.
  • While the US and China have lowered the temperature in their relationship after months of confrontation, their strategic rivalry is unlikely to subside long-term, analysts say.

Cameron Johnson, a partner at Shanghai-based consultancy Tidalwave Solutions, says Trump and Xi’s agreement means that US-China ties should not deteriorate in the near term.

“All in all, this is probably the best that both sides could have done given the circumstances,” he says.

Johnson notes, however, that the agreement will be reviewed annually, opening up the possibility of friction down the track.

“It allows both sides to calibrate the relationship, and also buying power, of each side every year now going forward,” he says.

The Chinese commerce ministry has confirmed that it will suspend its proposed export controls on rare earths for one year.

The announcement confirms Trump’s earlier statement that Beijing agreed to defer the restrictions, which had raised fears of massive disruption to global supply chains.

The critical minerals, used in the manufacture of high-tech goods including smartphones and electric cars, had been a key issue in Trump and Xi’s summit.

Residents of the Chinese city of Shenzhen are divided on whether US-China relations would improve after the Trump-Xi summit.

“Even if he agrees to peace negotiations now, who’s to say that once he goes back, he [Trump] may report something different,” 36-year-old Shenzhen resident Yao Wushen told the Reuters news agency.

“Americans are unreliable, the whole world knows.”

Li Chao, 48, was more optimistic.

“A meeting between leaders of two countries should mean that the two countries’ economic cooperation will be in a better position,” he told Reuters.

China dominates 90 percent of the world’s rare earth exports, which have crucial military and technology applications.

Earlier this month Beijing announced plans to further restrict supply of the minerals, prompting an added 100 percent tariff threat from Washington.

As we’ve been reporting, Trump has announced after his meeting with Xi that China has agreed to keep rare earth supply flowing. He also said the US will ease tariffs on Chinese goods.

Watch our video report on why these exports are such a key issue:

Here’s what’s been happening:

• Trump has been speaking to reporters on board Air Force One on his summit with Xi, describing the meeting as “amazing” and saying the two leaders made an “outstanding group of decisions”.
• He has said that the US will lower tariffs on China from 57 percent to 47 percent and that Xi has agreed to work hard to stop the flow of fentanyl ingredients to his country.
• China will also resume purchases of US soya beans immediately and will keep the exports of rare earths flowing, he added.
• Trump says he will visit China in April and that Xi will travel to the US shortly after that.
• The US leader is now on his way back to Washington, DC, while Xi – who has yet to comment on the talks – is set to deliver remarks at the APEC leaders’ summit in South Korea.

With Donald Trump, flattery will get you everywhere.

At least that appears to be the attitude of leaders who have been meeting with the US president on his first visit to East and Southeast Asia since he re-entered the White House in January.

In Malaysia, Prime Minister Anwar Ibrahim praised Trump for his “tenacity” and “courage” in achieving the “almost impossible” task of securing a ceasefire between Thailand and Cambodia.

In Japan, Prime Minister Sanae Takaichi gushed to Trump about how “impressed and inspired” she was by his peace efforts and said she recommended him for the Nobel Peace Prize.

In South Korea, President Lee Jae Myung gave Trump a golden crown, a replica of an artefact from the ancient Silla kingdom, and the country’s highest decoration, the Grand Order of Mugunghwa.

The outpouring of flattery came as Malaysia, Japan and South Korea all finalised trade deals with Trump after months of negotiations.

Read more here.

The US president has addressed a wide range of topics in his comments on board Air Force One.

Here’s more of what he said:

• On North Korea, Trump said he simply had no time to talk to the country’s leader, Kim Jong Un, about setting up a meeting.
• “We were never able to talk, because look, I was so busy and really this (meeting) is why we came. I think it would have been maybe disrespectful to the importance of this meeting if we did that,” he said. “So I’d come back, with respect to Kim Jong Un.”
• Trump also said he and Canada’s Prime Minister Mark Carney had “a very nice conversation” despite saying earlier that he had no plans to meet the Canadian leader. This comes after Trump called off trade talks with Canada over a political advertisement by the province of Ontario that criticised his tariffs.
• Trump spoke on his calls for more nuclear tests by the US, saying that if other countries were testing, Washington had a right to as well.
• But he said he would like to see denuclearisation. “It’s something we are actually talking to Russia about that. And China would be added to that if we do something,” he said.

Trump’s comments on board Air Force One were the first we got on how these talks progressed. There has been no official statement yet.

In typical upbeat fashion, Trump said that on a scale of one to 10, the meeting with Xi was a 12 and that many “amazing” decisions were made.

In terms of specifics, he said that the Chinese purchase of soybeans will resume immediately. This has been one of the most contentious issues of the trade war. China normally buys billions of dollars of American soybeans every year, and that trade dropped to virtually zero, really hurting communities across the US.

Trump also said Xi said he would work very hard to try to stop the export of precursor chemicals for fentanyl to the US. This is the painkiller drug that’s driving a crisis in many US cities.

And in return for all of this, Trump is saying the general tariffs set on Chinese goods will be reduced from the current 57 percent to 47 percent.

Also, the two have agreed to carry on talks, to carry on visits.

Trump says he will visit China next April with Xi coming to the US sometime after that.

Asian stock markets are rallying amid expectations for the announcement of a US-China trade deal.

The SSE Composite Index in Shanghai was up about 0.6 percent as of midday, local time, with Hong Kong’s Hang Seng Index about 0.5 higher.

South Korea’s Kospi and Japan’s Nikkei 225 also gained, rising about 0.4 percent and 0.8 percent, respectively.

The YouTuber mounted a loudspeaker on a vehicle before shouting slogans including “Xi Jinping out” as he and others disrupted a rally held by local Chinese residents welcoming their president in Busan, according to South Korea’s Chosun Daily newspaper.

The Busan Gangseo Police Station said the 59-year-old man, who has not been named, and two others were arrested on charges that include obstruction of official duties.

A Chinese diplomatic official who witnessed the protest reportedly lodged a complaint to police, the outlet said.

Anti-Chinese sentiment is on the rise in South Korea, according to polls, driven by Trump’s MAGA-inspired populist movement of disgraced former president, Yoon Suk Yeol, who was removed from office in April following a failed coup attempt.