trade deal

ABOARD AIR FORCE ONE — President Trump described his face-to-face with Chinese leader Xi Jinping on Thursday as a roaring success, saying he would cut tariffs on China, while Beijing had agreed to allow the export of rare earth elements and start buying American soybeans.

The president told reporters aboard Air Force One that the U.S. would lower tariffs implemented earlier this year as punishment on China for its selling of chemicals used to make fentanyl from 20% to 10%. That brings the total combined tariff rate on China down from 57% to 47%

“I guess on the scale from 0 to 10, with ten being the best, I would say the meeting was a 12,” Trump said. “I think it was a 12.”

Treasury Secretary Scott Bessent said China agreed to purchase 25 million metric tons of U.S. soybeans annually for the next three years, starting with 12 million metric tons from now to January. U.S. soybean exports to China, a huge market for them, had come to a standstill in the trade dispute.

“So you know, our great soybean farmers, who the Chinese used as political pawns, that’s off the table, and they should prosper in the years to come,” Bessent told Fox Business Network’s “Mornings with Maria.”

Trump said that he would go to China in April and Xi would come to the U.S. “some time after that.” The president said they also discussed the export of more advanced computer chips to China, saying that Nvidia would be in talks with Chinese officials.

Trump said he could sign a trade deal with China “pretty soon.”

Xi said Washington and Beijing would work to finalize their agreements to provide “peace of mind” to both countries and the rest of the world, according to a report on the meeting distributed by state media.

“Both sides should take the long-term perspective into account, focusing on the benefits of cooperation rather than falling into a vicious cycle of mutual retaliation,” he said.

Sources of tension remain

Despite Trump’s optimism after a 100-minute meeting with Xi in South Korea, there continues to be the potential for major tensions between the world’s two largest economies. Both nations are seeking dominant places in manufacturing, developing emerging technologies such as artificial intelligence, and shaping world affairs like Russia’s war in Ukraine.

Trump’s aggressive use of tariffs since returning to the White House for a second term, combined with China’s retaliatory limits on exports of rare earth elements, gave the meeting newfound urgency. There is a mutual recognition that neither side wants to risk blowing up the world economy in ways that could jeopardize their own country’s fortunes.

When the two were seated at the start of the meeting, Xi read prepared remarks that stressed a willingness to work together despite differences.

“Given our different national conditions, we do not always see eye to eye with each other,” he said through a translator. “It is normal for the two leading economies of the world to have frictions now and then.”

There was a slight difference in translation as China’s Xinhua News Agency reported Xi as telling Trump that having some differences is inevitable.

Finding ways to lower the temperature

The leaders met in Busan, South Korea, a port city about 47 miles south from Gyeongju, the main venue for the Asia-Pacific Economic Cooperation summit.

In the days leading up to the meeting, U.S. officials signaled that Trump did not intend to make good on a recent threat to impose an additional 100% import tax on Chinese goods, and China showed signs it was willing to relax its export controls on rare earths and also buy soybeans from America.

Officials from both countries met earlier this week in Kuala Lumpur to lay the groundwork for their leaders. Afterward, China’s top trade negotiator Li Chenggang said they had reached a “preliminary consensus,” a statement affirmed by U.S. Treasury Secretary Scott Bessent who said there was “ a very successful framework.”

Shortly before the meeting on Thursday, Trump posted on Truth Social that the meeting would be the “G2,” a recognition of America and China’s status as the world’s biggest economies. The Group of Seven and Group of 20 are other forums of industrialized nations.

But while those summits often happen at luxury spaces, this meeting took place in humbler surroundings: Trump and Xi met in a small gray building with a blue roof on a military base adjacent to Busan’s international airport.

The anticipated detente has given investors and businesses caught between the two nations a sense of relief. The U.S. stock market has climbed on the hopes of a trade framework coming out of the meeting.

Pressure points remain for both U.S. and China

Trump has outward confidence that the grounds for a deal are in place, but previous negotiations with China this year in Geneva, Switzerland and London had a start-stop quality to them. The initial promise of progress has repeatedly given way to both countries seeking a better position against the other.

“The proposed deal on the table fits the pattern we’ve seen all year: short-term stabilization dressed up as strategic progress,” said Craig Singleton, senior director of the China program at the Foundation for Defense of Democracies. “Both sides are managing volatility, calibrating just enough cooperation to avert crisis while the deeper rivalry endures.”

The U.S. and China have each shown they believe they have levers to pressure the other, and the past year has demonstrated that tentative steps forward can be short-lived.

For Trump, that pressure comes from tariffs.

China had faced new tariffs this year totaling 30%, of which 20% were tied to its role in fentanyl production. But the tariff rates have been volatile. In April, he announced plans to jack the rate on Chinese goods to 145%, only to abandon those plans as markets recoiled.

Then, on Oct. 10, Trump threatened a 100% import tax because of China’s rare earth restrictions. That figure, including past tariffs, would now be 47% “effective immediately,” Trump told reporters on Thursday.

Xi has his own chokehold on the world economy because China is the top producer and processor of the rare earth minerals needed to make fighter jets, robots, electric vehicles and other high-tech products.

China had tightened export restrictions on Oct. 9, repeating a cycle in which each nation jockeys for an edge only to back down after more trade talks.

What might also matter is what happens directly after their talks. Trump plans to return to Washington, while Xi plans to stay on in South Korea to meet with regional leaders during the Asia-Pacific Economic Cooperation summit, which officially begins on Friday.

“Xi sees an opportunity to position China as a reliable partner and bolster bilateral and multilateral relations with countries frustrated by the U.S. administration’s tariff policy,” said Jay Truesdale, a former State Department official who is CEO of TD International, a risk and intelligence advisory firm.

Boak, Megerian and Schiefelbein write for the Associated Press. Boak reported from Tokyo and Megerian reported from Busan, South Korea. Ken Moritsugu in Beijing and Seung Min Kim and Michelle Price in Washington contributed to this report.

WASHINGTON — President Trump faces the most important international meeting of his second term so far on Thursday: face-to-face negotiations with Xi Jinping, who has made China a formidable economic and military challenger to the United States.

The two presidents face a vast agenda during their meeting in Seoul, beginning with the two countries’ escalating trade war over tariffs and high-tech exports. The list also includes U.S. demands for a Chinese crackdown on fentanyl, China’s aid to Russia in its war with Ukraine, the future of Taiwan and China’s growing nuclear arsenal.

Trump has already promised, characteristically, that the meeting will be a major success.

“It’s going to be fantastic for both countries, and it’s going to be fantastic for the entire world,” he said last week.

But it isn’t yet clear that the summit’s concrete results will measure up to that high standard.

Treasury Secretary Scott Bessent said Sunday that the two sides have agreed to a “framework” under which China would delay implementing tight controls on rare earth elements, minerals crucial for the production of high-tech products from smartphones and electric vehicles to military aircraft and missiles. He said China has also agreed to resume buying soybeans from U.S. farmers and to crack down on fentanyl components.

In return, Bessent said, the United States will back down from its stinging tariffs on Chinese goods.

Nicholas Burns, the U.S. ambassador in Beijing under then-President Biden, said that kind of deal would amount to “an uneasy trade truce rather than a comprehensive trade deal.”

“That may be the best we can expect,” he said in an interview Monday. Still, he added, “it will be a positive step to stabilize world markets and allow the continuation of U.S.-China trade for the time being.”

But U.S. and Chinese officials have been close-mouthed on what, if anything, has been agreed on regarding Xi’s other big trade demand: easier U.S. restrictions on high-tech exports to China, especially advanced semiconductor chips used for artificial intelligence.

Burns said the two superpowers’ technology competition is “the most sensitive … in terms of where this relationship will head, which country will emerge more powerful.”

Giving China easy access to advanced semiconductors “would only help [the Chinese army] in its competition with the U.S. military for power in the Indo-Pacific,” he warned.

Other former officials and China hawks outside the administration have said, even more pointedly, that they worry that Trump may be too willing to trade long-term technology assets for short-term trade deals.

In August, Trump eased export controls to allow Nvidia, the world leader in AI chips, to sell more semiconductors to China — in an unusual deal under which the U.S. company would pay 15% of its revenue from the sales to the U.S. Treasury.

Matthew Pottinger, Trump’s top China advisor in his first term, protested in a recent podcast interview that the deal risked trading a strategic technology advantage “for $20 billion and Nvidia’s bottom line.”

Underlying the controversy over technology, some China watchers warn, is a basic mismatch between the two presidents: Trump is focused almost entirely on trade and commercial deals, while Xi is focused on displacing the United States as the biggest economic and military power in Asia.

“I don’t think the administration has a strategy toward China,” said Bonnie Glaser, a China expert at the German Marshall Fund of the United States. “It has a trade strategy, not a China strategy.”

“The administration does not seem to be focused on competition with China,” said Jonathan Czin, a former CIA analyst now at Washington’s Brookings Institution. “It’s focused on deal making. … It’s tactics without strategy.”

“We’ve fallen into a kind of trade and technology myopia,” he added. “We’re not talking about issues like China’s coercion [of smaller countries] in the South China Sea. … China doesn’t want to have that bigger, broader conversation.”

It isn’t clear that Trump and Xi will have either the time or inclination to talk in detail about anything other than trade.

And even on the front-burner economic issues, this week’s ceasefire is unlikely to produce a permanent peace.

“As with all such agreements, the devil will be in the details,” Burns, the former ambassador, said. “The two countries will remain fierce trade rivals. Expect friction ahead and further trade duels well into 2026.”

“Buckle up,” Czin said. “There are likely more sudden moves from Beijing ahead.”

In the long run, Trump’s legacy in U.S.-China relations will rest not only on trade deals but on the larger competition for economic and military power in the Pacific Rim. No matter how this week’s meetings go, those challenges still lie ahead.

SEOUL — President Trump announced on Wednesday that the U.S. had struck a trade deal with South Korea, which will now face a 15% tariff on its exports.

Under the deal, South Korea will invest $350 billion in key U.S. industries and purchase $100 billion worth of its liquified natural gas, Trump wrote on social media on Wednesday. He added that further investments would be announced when South Korean President Lee Jae Myung visits Washington in the next two weeks.

The new rate is a significant reduction from the 25% Trump had announced via a letter earlier this month, but still a blow to the longstanding free trade regime that had, for years, kept duties on goods from either country close to zero. Trump has long decried this arrangement as unfair to the U.S., which last year recorded a $66 billion trade deficit with South Korea.

“We are seeing that the negotiations happening in many countries since April are unfolding in a way that is very different from the principles of the WTO or FTA,” said Kim Yong-beom, a senior policy official for South Korea’s presidential office, at a press conference on Thursday. “It is regrettable.”

Kim said that South Korean negotiators had pushed for a 12.5% rate on automobiles — one of the country’s most important exports to the U.S. — but that they had been rebuffed, with Trump firm on his stance that “everybody gets 15%.”

U.S. and South Korean officials appear to be interpreting the deal — whose details are still scant — in different ways.

New cars for export on a car carrier trailer arrive at a port in Pyeongtaek, South Korea, on April 15, 2025.

(Lee Jin-man / Associated Press)

Calling it an “historic trade deal,” commerce secretary Howard Lutnick wrote on social media that “90% of the profits” of South Korea’s $350 billion investment would go “to the American people,” a claim that has immediately raised eyebrows in South Korea.

Trump said something similar about the $550 billion investment package included in the trade deal struck with Japan earlier this month. Japanese officials, on the other hand, have said the profits would be split proportionately, based on the amount of contribution and risk from each side.

At the press conference, Kim said that Seoul is operating under the assumption that 90% of the profits will be “re-invested” — not unilaterally claimed. He added that the specific terms still need to be laid out on a “per-project basis.”

“In a normal civilized country, who would be able to accept that we invest the money while the U.S. takes 90% of the profits?“ he asked.

South Korean President Lee Jae Myung has framed the $350 billion investment as a boost to South Korean shipbuilding, semiconductor and energy companies trying to make inroads into the U.S. markets.

“This agreement is the meeting of the U.S.’ interest in reviving manufacturing and our intention to make South Korea companies more competitive in the U.S. market,” he said in a social media post on Thursday. “I hope that it will strengthen industrial cooperation between South Korea and the U.S. as well as our military alliance.”

While Trump also said that “South Korea will be completely OPEN TO TRADE with the United States, and that they will accept American product including Cars and Trucks, Agriculture, etc,” Kim said that agriculture was not part of the deal and that no concessions on U.S. rice or beef — two major points of contention between Seoul and Washington — were given.

South Korea, which is the world’s top importer of American beef, currently bans beef from cattle that are older than 30 months on concerns it may introduce bovine spongiform encephalopathy, or mad cow disease.

Given its status as a staple crop and a critical source of farmers’ livelihoods, rice is one of the few agricultural goods heavily protected by the South Korean government. Seoul currently imposes a 5% tariff on U.S. rice up to 132,304 tons, and 513% for any excess.

“We were able to successfully defend a lot of our positions in those areas,” Kim said.

President Trump announced a trade framework with Japan on Tuesday, placing a 15% tax on goods imported from that nation.

“This Deal will create Hundreds of Thousands of Jobs — There has never been anything like it,” Trump posted on Truth Social, adding that the United States “will continue to always have a great relationship with the Country of Japan.”

The president said Japan would invest “at my direction” $550 billion into the U.S. and would “open” its economy to American autos and rice. The 15% tax on imported Japanese goods is a meaningful drop from the 25% rate that Trump, in a recent letter to Japanese Prime Minister Shigeru Ishiba, said would be levied starting Aug. 1.

Early Wednesday, Ishiba acknowledged the new trade agreement, saying it would benefit both sides and help them work together.

With the announcement, Trump is seeking to tout his ability as a dealmaker — even as his tariffs, when initially announced in early April, led to a market panic and fears of slower growth that for the moment appear to have subsided. Key details remained unclear from his post, such as whether Japanese-built autos would face a higher 25% tariff that Trump imposed on the sector.

But the framework fits a growing pattern for Trump, who is eager to portray the tariffs as win for the U.S. His administration says the revenues will help reduce the budget deficit and more factories will relocate to America to avoid the import taxes and cause trade imbalances to disappear.

The wave of tariffs continues to be a source of uncertainty about whether it could lead to higher prices for consumers and businesses if companies simply pass along the costs. The problem was seen sharply Tuesday after General Motors reported a 35% drop in its net income during the second quarter as it warned that tariffs would hit its business in the months ahead, causing its stock to tumble.

As the Aug. 1 deadline for the tariff rates in his letters to world leaders is approaching, Trump also announced a trade framework with the Philippines that would impose a tariff of 19% on its goods, while American-made products would face no import taxes. The president also reaffirmed his 19% tariffs on Indonesia.

The U.S. ran a $69.4-billion trade imbalance on goods with Japan last year, according to the Census Bureau.

America had a trade imbalance of $17.9 billion with Indonesia and an imbalance of $4.9 billion with the Philippines. Both nations are less affluent than the U.S. and an imbalance means America imports more from those countries than it exports to them.

The president is set to impose the broad tariffs listed in his recent letters to other world leaders on Aug. 1, raising questions of whether there will be any breakthrough in talks with the European Union. At a Tuesday dinner, Trump said the EU would be in Washington on Wednesday for trade talks.

“We have Europe coming in tomorrow, the next day,” Trump told guests.

The president earlier this month sent a letter threatening the 27 member states in the EU with 30% taxes on their goods to be imposed starting on Aug. 1.

The Trump administration has a separate negotiating period with China that is currently set to run through Aug. 12 as goods from that nation are taxed at an additional 30% baseline.

Treasury Secretary Scott Bessent said he would be in the Swedish capital of Stockholm next Monday and Tuesday to meet with his Chinese counterparts. Bessent said his goal is to shift the American economy away from consumption and to enable more consumer spending in the manufacturing-heavy Chinese economy.

“President Trump is remaking the U.S. into a manufacturing economy,” Bessent said on the Fox Business show “Mornings With Maria.” “If we could do that together, we do more manufacturing, they do more consumption. That would be a home run for the global economy.”

Boak writes for the Associated Press.

WASHINGTON — President Trump welcomed Philippine President Ferdinand Marcos Jr. on Tuesday at the White House, as the two countries are seeking closer security and economic ties in the face of shifting geopolitics in the Indo-Pacific region.

Marcos, who met Secretary of State Marco Rubio and Defense Secretary Pete Hegseth on Monday, is the first Southeast Asian leader to hold talks with Trump in his second term.

Marcos’ three-day visit shows the importance of the alliance between the treaty partners when China is increasingly assertive in the South China Sea, where Manila and Beijing have clashed over the hotly contested Scarborough Shoal.

As the two leaders sat in the Oval Office in front of reporters on Tuesday, Trump said they would be talking about “war and peace” and trade.

“We’re very close to finishing a trade deal, big trade deal, actually,” Trump said.

Marcos spoke warmly of the relationship between their two nations and said, “This has evolved into as important a relationship as is possible to have.”

Trump, as he does in many of his appearances, veered off topic as he fielded questions from reporters.

In response to a question about his Justice Department’s decision to interview Jeffrey Epstein’s former girlfriend, Trump launched into a long answer repeating falsehoods about his loss to Democrat Joe Biden in the 2020 presidential election and the Russia investigation during his first term, along with comments about targeting his political adversaries, including former President Obama and former Secretary of State Hillary Clinton.

“After what they did to me, whether it’s right or wrong, it’s time to go after people,” Trump said, with Marcos sitting nearby.

During the two leaders’ meeting before news cameras, they didn’t reveal details or hang-ups of any possible deal, but Trump called Marcos a “tough negotiator.”

When asked by a reporter how he plans to balance his country’s relationships between the U.S. and China, Marcos said there was no need to balance “because our foreign policy is an independent one.”

“Our strongest partner has always been the United States,” he said.

Washington sees Beijing, the world’s No. 2 economy, as its biggest competitor, and consecutive presidential administrations have sought to shift U.S. military and economic focus to the Asia-Pacific in a bid to counter China. Trump, like others before him, has been distracted by efforts to broker peace in a range of conflicts, from Ukraine to Gaza.

On Tuesday, when asked about the U.S. defense commitment to the Philippines, Chinese Foreign Ministry Spokesperson Guo Jiakun said: “Whatever cooperation the U.S. and the Philippines have, it should not target or harm any third party, still less incite confrontation and heighten tensions in the region.”

Tariffs also are expected to be on the agenda. Trump has threatened to impose 20% tariffs on Filipino goods on Aug. 1 unless the two sides can strike a deal.

On Sunday, before heading to Washington, Marcos said he intended to tell Trump and his administration “that the Philippines is ready to negotiate a bilateral trade deal that will ensure strong, mutually beneficial and future-oriented collaborations that only the United States and the Philippines will be able to take advantage of,” according to his office.

Manila is open to offering zero tariffs on some U.S. goods to strike a deal with Trump, finance chief Ralph Recto told local journalists.

The White House said ahead of the meeting that Trump would discuss with Marcos the shared commitment to upholding a free, open, prosperous and secure Indo-Pacific.

Before a meeting with Marcos at the Pentagon, Hegseth reiterated America’s commitment to “achieving peace through strength” in the region.

Marcos, whose country is one of the oldest U.S. treaty allies in the Pacific region, told Hegseth that the assurance to come to each other’s mutual defense “continues to be the cornerstone of that relationship, especially when it comes to defense and security cooperation.”

He said the cooperation has deepened since Hegseth’s March visit to Manila, including joint exercises and U.S. support in modernizing the Philippines’ armed forces. Marcos thanked the U.S. for support “that we need in the face of the threats that we, our country, is facing.”

China, the Philippines, Vietnam, Malaysia, Brunei and Taiwan have been involved in long-unresolved territorial conflicts in the South China Sea, a busy shipping passage for global trade.

The Chinese coast guard has repeatedly used water cannons to hit Filipino boats in the South China Sea. China accused those vessels of entering the waters illegally or encroaching on its territory.

Hegseth told a security forum in Singapore in May that China poses a threat and the U.S. is “reorienting toward deterring aggression by Communist China.”

During Marcos’ meeting Monday with Rubio, the two reaffirmed the alliance “to maintain peace and stability” in the region and discussed closer economic ties, including boosting supply chains, State Department spokesperson Tammy Bruce said.

The U.S. has endeavored to keep communication open with Beijing. Rubio and Chinese Foreign Minister Wang Yi met this month on the sidelines of the Assn. of Southeast Asian Nations regional forum in Kuala Lumpur, Malaysia. They agreed to explore “areas of potential cooperation” and stressed the importance of managing differences.

Tang and Price write for the Associated Press. AP writer Chris Megerian contributed to this report.

WASHINGTON — President Trump announced a trade deal with Vietnam on Wednesday that would allow U.S. goods to enter the country duty-free.

Vietnamese exports to the United States, by contrast, would face a 20% levy.

On his Truth Social platform, Trump declared the pact “a Great Deal of Cooperation between our two Countries.’’

In April, Trump announced a 46% tax on Vietnamese imports — one of his so-called reciprocal tariffs targeting dozens of countries with which the United States runs trade deficits. Trump promptly suspended the reciprocal tariffs for 90 days to allow for negotiations like the one with Vietnam. The pause expires Tuesday, but so far the Trump administration has reached a trade agreement with only one of those countries — the United Kingdom. (Trump has also reached a “framework’’ agreement with China in a separate trade dispute.)

“Vietnam has been very keen to get out from under this,’’ said Mary Lovely, senior fellow at the Peterson Institute for International Economics. “This is forcing a smaller country to eat it, basically. We can do that. It’s the big countries that everybody’s keeping their eyes on.’’ She doubts that Trump will be able to impose such a lopsided agreement on big trading partners such as the European Union and Japan.

The United States last year ran a $122-billion trade deficit with Vietnam. That was the third-biggest U.S. trade gap — the difference between the goods and services it buys from other countries and those it sells them — behind the ones with China and Mexico.

In addition to the 20% tariffs, Trump said the U.S. would impose a 40% tax on “transshipping’’ — goods from another country that stop in Vietnam on their way to the United States. Washington complains that Chinese goods have been dodging higher U.S. tariffs by transiting through Vietnam.

A February study in the Harvard Business Review found that there was “much less rerouting than previously believed.’’

In May, Vietnam approved a $1.5-billion project by the Trump Organization and a local partner to build a massive golf resort complex near Hanoi, covering an area roughly the size of 336 football fields.

Vietnam was a beneficiary of American efforts to counter China’s influence. Companies looking to diversify supply chains away from China flocked to Vietnam.

In 2023, it became the only country to host both former President Joe Biden and Chinese leader Xi Jinping on state visits. That year, the U.S. upgraded Vietnam to its highest diplomatic status — comprehensive strategic partner — placing it on par with China and Russia.

Wiseman and Ghosal write for the Associated Press. Ghosal reported from Hanoi, Vietnam.