Trump and Xi to Discuss Critical Trade Issues in Busan
U.S. President Donald Trump is set to meet Chinese President Xi Jinping in Busan, South Korea, on Thursday for a pivotal discussion on several pressing bilateral concerns. This meeting marks their first face-to-face encounter since Trump returned to office in January 2025, amid escalating tensions between the two economic superpowers. A Chinese Foreign Ministry spokesperson confirmed the meeting, emphasizing that both sides are eager to work toward positive outcomes. While details remain sparse, key topics expected to dominate the agenda include fentanyl-related tariffs, rare earth mineral export controls, and semiconductor technology trade.
Fentanyl Tariffs and Drug Flow Controls
President Trump indicated that reducing tariffs linked to fentanyl imports will be a major discussion point. Currently, the U.S. imposes a 20% tariff on Chinese goods related to fentanyl chemicals. The Wall Street Journal recently reported that the U.S. could halve this tariff to 10% in exchange for China’s commitment to crack down on the export of fentanyl precursor chemicals. Such a reduction would lower the average tariff on most Chinese imports from approximately 55% to 45%, signaling a potential easing of trade barriers if concrete enforcement measures are agreed upon.
Rare Earth Export Controls and Trade Retaliations
Bilateral tensions have intensified recently due to China’s rare earth export controls and the U.S. response involving port fees on Chinese vessels and potential software export restrictions. Trump acknowledged ongoing discussions regarding the timing and terms of any rare earth export control suspension but did not provide specifics. Securing access to rare earth minerals remains a strategic priority for the U.S., given their critical role in high-tech manufacturing and defense applications.
Semiconductor Exports and Nvidia Chips
Technology trade, particularly concerning Nvidia’s Blackwell AI chips, is another anticipated discussion topic. Trump hinted that semiconductor exports to China might be addressed during the meeting, reflecting ongoing U.S. concerns over technology transfer and national security. Potential concessions could include a loosening of export controls on certain semiconductor equipment and AI chips, contingent on reciprocal commitments from Beijing.
Trade Detente Nears Expiration Amid Tariff Threats
The current tariff truce between the U.S. and China is set to expire on November 10. Without an extension, the risk of renewed tariffs looms large, including Trump’s threat to impose additional 100% tariffs on Chinese goods starting November 1. Observers note that this meeting represents a critical juncture to negotiate a renewed trade agreement that could prevent further escalation and stabilize economic relations.
Additional Agenda Items and Strategic Interests
While Taiwan may not be a central topic, Trump acknowledged the possibility that Xi might raise it. Moreover, the meeting is expected to cover broader strategic trade issues, including Boeing aircraft purchases and approval for TikTok’s U.S. operations. The discussions coincide with Trump’s wider Asia tour, during which he has secured multiple trade and mineral agreements with Southeast Asian nations and Japan.
FinOracleAI — Market View
The upcoming Trump-Xi meeting represents a critical opportunity to de-escalate growing trade tensions between the U.S. and China. Key areas such as fentanyl-related tariffs, rare earth export controls, and semiconductor trade will be pivotal in shaping the near-term trajectory of bilateral relations.
- Opportunities: Potential tariff reductions could ease supply chain disruptions and improve trade flows.
- Risks: Failure to reach consensus may trigger tariff escalations and further economic friction.
- Securing rare earth mineral access is vital for U.S. technological competitiveness.
- Technology export negotiations will impact the future of AI chip and semiconductor industries.
- Progress on fentanyl controls could bolster U.S. public health and law enforcement efforts.
Impact: The meeting’s outcomes will significantly influence U.S.-China trade dynamics and global markets. A constructive agreement could stabilize tensions and support economic growth, while failure risks exacerbating geopolitical and commercial volatility.
