U.S. Cuts Tariffs, Lowers Trade Tensions With China After Trump-Xi Meeting

Latest Developments

Trump and Xi Meet: President Donald Trump met with Chinese President Xi Jinping in South Korea on October 30, on the sidelines of the Asia-Pacific Economic Cooperation summit. When asked about the outcome of the two leaders’ first face-to-face meeting in six years, Trump asserted, “Overall, I guess on the scale of from zero to 10, with 10 being the best, I would say the meeting was a 12.” For his part, Xi stated that he was willing to “lay a solid foundation for China-U.S. relations and create a favorable environment for the development of both nations.”
Trade Tensions Eased: While no deal was signed, the two leaders settled several trade disputes. Trump said that he would cut tariffs on Chinese exports from 57 percent to 47 percent after the two leaders reached an understanding to strengthen China’s export restrictions on chemicals used to make the deadly drug fentanyl. Xi also agreed to import soybeans and other agricultural products grown in America and to a one-year pause in restrictions on the export of rare earth minerals to the United States. In a social media post, Trump also claimed that Xi agreed to “begin the process of purchasing American Energy” and previewed that “a very large scale transaction may take place concerning the purchase of Oil and Gas from the Great State of Alaska.” China’s Commerce Ministry claimed that the United States agreed to suspend some restrictions on exports to Chinese companies on a U.S. backlist.
Taiwan Not Mentioned: According to Trump, the subject of Taiwan was not raised during the meeting. It “never came up. [Taiwan] was not discussed, actually,” Trump said on Air Force One following the summit. Chinese Foreign Minister Guo Jiakun stressed that “China’s reunification is unstoppable” and cautioned countries against maintaining “so-called ‘diplomatic ties’ with the Taiwan authorities.”

FDD Expert Response

“A binding long-term offtake agreement for Alaska oil and gas from Beijing would be potentially game-changing for key infrastructure projects like the Alaska LNG pipeline. This would mark a strategic shift by Beijing in America’s favor, though Xi may see this as creating interdependency within American energy production designed to strengthen China’s neighbors. Let’s see what the details are and whether China follows through.” — Richard Goldberg, Senior Advisor

“Trump’s meeting with Xi produced a tactical pause on ongoing trade tit-for-tats. However, if the United States commits to continually delaying new export controls on Chinese firms embedded within Beijing’s military-industrial complex, Washington will be passing up a key tool for stymying the PLA’s build-up.” — Jack Burnham, Research Analyst