The United States and China have been inching toward an all-out trade war since before President Donald Trump’s election. But it now looks like a deal has been made with Chinese President Xi Jinping that would avert an economic war, at least for now.
Trump and Xi spoke Thursday morning in Busan during a highly anticipated meeting that lasted nearly 2 hours. According to a report by Time Magazine, Trump was accompanied by Secretary of State Marco Rubio, Trade Representative Jamieson Greer, Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, Chief of Staff Susie Wiles, and U.S. Ambassador to China David Perdue. Chief of Staff Cai Qi, Foreign Minister Wang Yi, Vice Foreign Minister Ma Zhaoxu, Vice Premier He Lifeng, Commerce Minister Wang Wentao, and Chairman of the National Development and Reform Commission Zheng Shanjie accompanied Xi.
Trump hailed the meeting as a 12 out of 10. “I guess, on the scale from zero to 10, with 10 being the best, I would say the meeting was a 12,” Trump told reporters aboard Air Force One after the meeting. “You know, just the whole relationship is very, very important. I think it was very good.”
The details and comprehensiveness of the deal are still unclear. This news has, however, come as a reprieve for consumers, investors, and business owners. This deal does scrape Trump’s threat of a 100% tariff increase, immediately reduces the total tariff rate on Chinese goods, and resolves, at least for now, several of the more contentious trade issues between the U.S. and China.
According to the Chinese Ministry of Commerce’s statement about the framework agreement, China will suspend its rare earths licensing measures for at least a year.
Thursday was the first meeting between Trump and Xi in six years. Busan rounded off Trump’s three-country tour of Asia, which included the ASEAN summit in Malaysia, Trump’s first meeting with Japan’s new Prime Minister Sakae Takaichi in Tokyo, and the APEC summit as well as a meeting with South Korea’s new President Lee Jae-myung in Gyeongju. –Time Magazine
“We do not always see eye-to-eye with each other, and it is normal for the two leading economies of the world to have frictions now and then,” Xi said to Trump in preliminary remarks. “And in the face of winds, waves, and challenges, you and I, at the helm of relations, should stay the right course and ensure the steady sailing forward of the giant ship of China-U.S. relations.”
“He’s a very tough negotiator, that’s not good,” Trump said with a laugh in preliminary remarks.
Xi will be traveling to the United States sometime next year, while Trump plans to visit China in April.
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