The US will slash some tariffs and export controls in a new one-year deal with China, which has agreed to hold off on new rare earth restrictions. This agreement marks a significant de-escalation in the trade war.
The deal was sealed after a meeting between President Trump, who called it “amazing,” and President Xi. China’s commitment not to tighten rare earth restrictions averts a potential 100% US import tax threatened by Trump.
In addition to the rare earth pause, China also agreed to purchase US soybeans. The US, beyond slashing tariffs, also agreed to postpone a new, restrictive technology measure for one year.
This postponed rule, which China strongly opposed, would have barred thousands of Chinese firms from accessing US technology if they were partly owned by a sanctioned company.
Speaking at the APEC forum in South Korea after the meeting, President Xi called for “genuine multilateralism.” He warned against “breaking supply chains” and urged nations to “join hands” in trade.
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