In a major diplomatic development, the United States and China have agreed to a new trade deal that effectively reverses several measures imposed during their long-running trade war. The agreement, finalized after a high-profile meeting between U.S. President Donald Trump and Chinese President Xi Jinping in South Korea, is being viewed as a significant step toward restoring global trade stability.
While the latest deal doesn’t rewrite economic history, it marks a return to cooperation after years of tension, tariffs, and uncertainty.
Tariffs Rolled Back, Soybean Trade Resumes
According to official statements, both countries have agreed to reduce import tariffs to around 10%, rolling back the steep duties imposed earlier in 2025.
The United States will keep limited tariffs on chemicals linked to fentanyl production, while China will remove its retaliatory tariffs on American farm goods.
As part of the accord, China will purchase 12 million metric tons of U.S. soybeans by January and continue buying at least 25 million tons annually for the next three years — a key relief for American farmers affected by the earlier trade conflict.
U.S. Secretary of Agriculture Brooke Rollins confirmed the development, calling it “a positive move toward restoring agricultural balance between the two nations.”
Rare Earth and Export Control Truce
Another major outcome is a one-year pause on export restrictions involving rare earth elements — critical materials used in electronics and defense industries.
Beijing has agreed to temporarily suspend its export permit rules, while Washington will pause certain export control policies on Chinese-linked companies for the same duration.
“This window gives both sides time to strengthen domestic production and innovation,” said Wade Senti, president of the U.S. permanent magnet firm AML.
Port Fees Suspended for a Year
The U.S. had introduced port fees targeting Chinese vessels earlier this year, which China countered with similar measures. Under the new deal, both sides will suspend port fees for one year, allowing smoother trade operations and reducing logistic costs.
Political Reactions and Market Impact
While President Trump hailed the agreement as a “roaring success,” critics argue it merely fixes problems created by his own trade war.
Senate Minority Leader Chuck Schumer remarked that “prices have gone up, and nothing substantial has changed,” calling the deal “damage control, not diplomacy.”
Economists, however, see the truce as a stabilizing moment for both economies. “It restores predictability to U.S.–China relations and eases global market anxiety,” said Eswar Prasad, an economist at Cornell University.
Looking Ahead: More Talks in 2026
Both leaders are expected to continue negotiations, with Trump planning a visit to China in April 2026, followed by Xi Jinping’s reciprocal visit to Washington.
Experts believe future discussions may address deeper structural issues such as intellectual property, manufacturing dominance, and market access.
Former diplomat Kurt Campbell summarized the outlook best:
“Trump plays for short-term wins, while China thinks in decades. The coming months will show whether this truce turns into true transformation.”
