Trump-Xi Summit in Seoul Yields Tariff Cuts: U.S. Slashes Rates on Chinese Goods, Easing Fentanyl and Rare Earths Tensions

Seoul, South Korea, October 31, 2025** – In a surprise breakthrough at the Asia-Pacific Economic Cooperation (APEC) summit, U.S. President Donald Trump announced immediate tariff reductions on select Chinese imports following a 100-minute closed-door meeting with Chinese President Xi Jinping, hailing the talks as "amazing" and a step toward "fair trade for American workers." The deal, which trims tariffs on fentanyl-related chemicals from 20% to 10% and overall rates on affected goods from 57% to 47%, marks the first major de-escalation in the U.S.-China trade war since Trump's return to the White House earlier this year.

The impromptu bilateral huddle, held Thursday afternoon on the sidelines of the APEC leaders' forum at the Lotte World Tower in Seoul, came amid heightened rhetoric over Beijing's dominance in rare earth minerals and the ongoing opioid crisis fueled by Chinese precursors. Trump, fresh from bilateral meetings with South Korean President Yoon Suk Yeol, surprised aides by requesting the sit-down with Xi, who arrived in the host nation for the summit after a state visit to Vietnam. "We had a fantastic discussion—better than anyone expected. Xi is a tough negotiator, but he's smart. We got it done," Trump told reporters in the hotel lobby, flashing a thumbs-up as flashes popped.

 Deal Details: Fentanyl Focus and Rare Earth Reprieve

At the heart of the agreement is a targeted rollback on tariffs imposed in March 2025, when Trump slapped 30% duties on $50 billion in Chinese chemicals and electronics linked to fentanyl production, citing over 100,000 U.S. overdose deaths annually. In exchange, Xi pledged to "expedite" enforcement against illicit precursor exports and expand U.S. purchases of rare earths—critical for semiconductors, electric vehicles, and defense tech—while delaying new export controls that had rattled markets last month. Beijing will also commit to buying an additional $20 billion in U.S. agricultural products over the next year, echoing Phase One of the 2020 trade deal but with stricter verification mechanisms.

The tariff cuts, effective at midnight ET, are expected to save U.S. importers $5-7 billion annually, per preliminary Commerce Department estimates, while boosting Nvidia and other chipmakers reliant on Chinese supply chains. Wall Street reacted bullishly, with the Dow Jones surging 1.2% in after-hours trading and the yuan strengthening 0.5% against the dollar. "This is a win for de-risking without decoupling," said economist Paul Ashworth of Capital Economics, noting the move averts a projected 2% drag on global GDP from escalated duties.

 Backdrop of Bilateral Strain and Summit Stakes

The Seoul encounter caps a year of frosty U.S.-China relations, exacerbated by Trump's "reciprocal tariffs" on $300 billion in Chinese goods upon inauguration and Xi's retaliatory probes into U.S. tech firms. Intelligence briefings had warned of potential flashpoints at APEC, including Taiwan arms sales and South China Sea patrols, but the leaders steered clear, focusing on economics. A senior U.S. official, speaking anonymously, described the vibe as "pragmatic—Xi needed a concession to sell at home, and Trump wanted fentanyl headlines before midterms."

Critics, however, tempered the optimism. Senate Finance Committee Ranking Member Ron Wyden (D-OR) called the deal "a Band-Aid on a bullet wound," arguing it lacks enforceable labor and IP protections that doomed prior pacts. In Beijing, state media framed it as "mutual respect," with Xi's readout emphasizing "strategic stability" and hinting at further talks on climate and AI governance. Human rights groups expressed dismay, warning the thaw could sideline Uyghur and Hong Kong issues.

As APEC wraps with a joint communique on supply chain resilience, the Trump-Xi detente injects rare positivity into U.S.-Asia ties. "It's advantage Xi for now—he got tariff relief without big concessions," CNN analyst Fareed Zakaria observed, but added that Trump's "art of the deal" could yield more if momentum holds. For global markets and manufacturers, the message is clear: the trade war simmers, not boils—yet.