Trump-Xi talks ended without signing agreements, but markets expect them to be concluded soon

Today, in Busan (South Korea), a meeting between Chinese President Xi Jinping and US President Trump took place at a military base, the first since 2019. The meeting between the leaders of the US and China lasted 1 hour and 40 minutes, but both heads of state left without making statements to the press.

Trump was accompanied by Treasury Secretary Scott Bessant, Secretary of State Marco Rubio, Commerce Secretary Howard Lutnick, White House Chief of Staff Susie Wiles, and U.S. Trade Representative Jamison Greer.

The parties discussed a number of issues, including the supply of rare earth elements and chips, the issue of fentanyl and the purchase of soybeans, restrictions on nuclear weapons, the abolition of some tariffs and confirmation of the “one China” policy, as well as a reduction in energy imports from the Russian Federation in order to force the aggressor to stop the war against Ukraine.

Markets expected that Trump would be able to agree at least on increasing China’s purchases of American soybeans, but the PRC wants to sign a comprehensive trade agreement with the abolition of tariffs on Chinese goods.

President Trump said ahead of the meeting that Washington and Beijing would have a “fantastic relationship” in the long term.

In turn, Xi Jinping reported that negotiators from China and the United States had reached a basic consensus on resolving major trade and economic contradictions.

Chinese stocks rose to a decade-high and the yuan’s exchange rate against the dollar reached a near-year peak as investors hoped for an easing of trade tensions that have disrupted supply routes and shaken confidence in global business.

After the meeting, Trump said from the plane that the parties had made several “outstanding” decisions. “As you know, I imposed a 20 percent tariff on goods from China due to the importation (into the United States) of the drug fentanyl. That’s a big tariff. I’ve reduced it by 10 percent,” Trump said, adding that Beijing would work to stop the flow of this substance, and the tariff on China is currently 47 percent.

Trump said a trade deal with China has been reached, but it will be a one-year deal that will be reviewed later. He said the deal could be signed soon, as there are “no significant obstacles” to doing so. He also said he had reduced tariffs on Chinese goods imposed over fentanyl imports to 10% from 20%.

Ahead of the US-China summit, China’s state-owned COFCO purchased three shipments of soybeans (180,000 tonnes) from the US, marking China’s first purchase of the new crop of US soybeans. Analysts do not expect a significant recovery in demand for US soybeans after recent large purchases from South America covered China’s soybean needs until the end of the year, leaving China with only a small additional purchase of around 10 million tonnes.

So China will likely continue to expect further concessions from the US to sign a trade deal. Recall that Trump’s official visit to China is scheduled for April 2026.

Tags: China, USA