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Trump Cuts Tariffs on China 10/30 06:06
President Donald Trump described his face-to-face with Chinese leader Xi
Jinping on Thursday as a roaring success, saying he would cut tariffs on China,
while Beijing had agreed to allow the export of rare earth elements and start
buying American soybeans.
ABOARD AIR FORCE ONE (AP) -- President Donald Trump described his
face-to-face with Chinese leader Xi Jinping on Thursday as a roaring success,
saying he would cut tariffs on China, while Beijing had agreed to allow the
export of rare earth elements and start buying American soybeans.
The president told reporters aboard Air Force One that the U.S. would lower
tariffs implemented earlier this year as punishment on China for its selling of
chemicals used to make fentanyl from 20% to 10%. That brings the total combined
tariff rate on China down from 57% to 47%
"I guess on the scale from 0 to 10, with ten being the best, I would say the
meeting was a 12," Trump said. "I think it was a 12."
Trump said that he would go to China in April and Xi would come to the U.S.
"some time after that." The president said they also discussed the export of
more advanced computer chips to China, saying that Nvidia would be in talks
with Chinese officials.
Trump said he could sign a trade deal with China "pretty soon."
Xi said Washington and Beijing would work to finalize their agreements to
provide "peace of mind" to both countries and the rest of the world, according
to a report on the meeting distributed by state media.
"Both sides should take the long-term perspective into account, focusing on
the benefits of cooperation rather than falling into a vicious cycle of mutual
retaliation," he said.
Sources of tension remain
Despite Trump's optimism after a 100-minute meeting with Xi in South Korea,
there continues to be the potential for major tensions between the world's two
largest economies. Both nations are seeking dominant places in manufacturing,
developing emerging technologies such as artificial intelligence, and shaping
world affairs like Russia's war in Ukraine.
Trump's aggressive use of tariffs since returning to the White House for a
second term, combined with China's retaliatory limits on exports of rare earth
elements, gave the meeting newfound urgency. There is a mutual recognition that
neither side wants to risk blowing up the world economy in ways that could
jeopardize their own country's fortunes.
When the two were seated at the start of the meeting, Xi read prepared
remarks that stressed a willingness to work together despite differences.
"Given our different national conditions, we do not always see eye to eye
with each other," he said through a translator. "It is normal for the two
leading economies of the world to have frictions now and then."
There was a slight difference in translation as China's Xinhua News Agency
reported Xi as telling Trump that having some differences is inevitable.
Finding ways to lower the temperature
The leaders met in Busan, South Korea, a port city about 76 kilometers (47
miles) south from Gyeongju, the main venue for the Asia-Pacific Economic
Cooperation summit.
In the days leading up to the meeting, U.S. officials signaled that Trump
did not intend to make good on a recent threat to impose an additional 100%
import tax on Chinese goods, and China showed signs it was willing to relax its
export controls on rare earths and also buy soybeans from America.
Officials from both countries met earlier this week in Kuala Lumpur to lay
the groundwork for their leaders. Afterward, China's top trade negotiator Li
Chenggang said they had reached a "preliminary consensus," a statement affirmed
by U.S. Treasury Secretary Scott Bessent who said there was " a very successful
framework."
Shortly before the meeting on Thursday, Trump posted on Truth Social that
the meeting would be the "G2," a recognition of America and China's status as
the world's biggest economies. The Group of Seven and Group of 20 are other
forums of industrialized nations.
But while those summits often happen at luxury spaces, this meeting took
place in humbler surroundings: Trump and Xi met in a small gray building with a
blue roof on a military base adjacent to Busan's international airport.
The anticipated detente has given investors and businesses caught between
the two nations a sense of relief. The U.S. stock market has climbed on the
hopes of a trade framework coming out of the meeting.
Pressure points remain for both US and China
Trump has outward confidence that the grounds for a deal are in place, but
previous negotiations with China this year in Geneva, Switzerland and London
had a start-stop quality to them. The initial promise of progress has
repeatedly given way to both countries seeking a better position against the
other.
"The proposed deal on the table fits the pattern we've seen all year:
short-term stabilization dressed up as strategic progress," said Craig
Singleton, senior director of the China program at the Foundation for Defense
of Democracies. "Both sides are managing volatility, calibrating just enough
cooperation to avert crisis while the deeper rivalry endures."
The U.S. and China have each shown they believe they have levers to pressure
the other, and the past year has demonstrated that tentative steps forward can
be short-lived.
For Trump, that pressure comes from tariffs.
China had faced new tariffs this year totaling 30%, of which 20% were tied
to its role in fentanyl production. But the tariff rates have been volatile. In
April, he announced plans to jack the rate on Chinese goods to 145%, only to
abandon those plans as markets recoiled.
Then, on Oct. 10, Trump threatened a 100% import tax because of China's rare
earth restrictions. That figure, including past tariffs, would now be 47%
"effective immediately," Trump told reporters on Thursday.
Xi has his own chokehold on the world economy because China is the top
producer and processor of the rare earth minerals needed to make fighter jets,
robots, electric vehicles and other high-tech products.
China had tightened export restrictions on Oct. 9, repeating a cycle in
which each nation jockeys for an edge only to back down after more trade talks.
What might also matter is what happens directly after their talks. Trump
plans to return to Washington, while Xi plans to stay on in South Korea to meet
with regional leaders during the Asia-Pacific Economic Cooperation summit,
which officially begins on Friday.
"Xi sees an opportunity to position China as a reliable partner and bolster
bilateral and multilateral relations with countries frustrated by the U.S.
administration's tariff policy," said Jay Truesdale, a former State Department
official who is CEO of TD International, a risk and intelligence advisory firm.
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