Trump and Xi reach agreement: rare earths, fentanyl, and a cautious thaw in US-China relations

Trump and Xi reach agreement: rare earths, fentanyl, and a cautious thaw in US-China relations

US President Donald Trump announced a one-year agreement with China for the supply of rare earth and critical minerals.
He simultaneously reduced tariffs on fentanyl and related products from 20% to 10% , symbolizing the diplomatic compromise reached at a meeting with Chinese President Xi Jinping in South Korea.
Trump said the agreement includes annual reviews, and China pledges to more aggressively combat the spread of fentanyl and resume purchasing American agricultural products, including soybeans.

The markets reacted instantly:

Soybean futures on the Chicago Board of Trade fell 1.6%;
China's rare earth industry index CSI rose more than 2% (LSEG data).


Trump also announced that the two sides had discussed supplies of Nvidia AI chips , but that China would not receive the most advanced Blackwell models. At the same time, the US President expressed his readiness to personally visit China in April and then invite Xi Jinping to make a return visit.

Analysts are calling the meeting a "turning point": for the first time in six years, the two leaders were able to reach not just a truce, but concrete decisions concerning strategic sectors.

Trump and Xi reach agreement: rare earths, fentanyl, and a cautious thaw in US-China relations

These agreements exceed expectations – Trump and Xi’s diplomacy has shown that personal contact can defuse even the most acute contradictions.

However, experts warn that the differences will not disappear completely.

During the summit, which lasted 1 hour and 40 minutes, Xi Jinping emphasized:

"China and the United States should be friends and partners. Our differences are natural, but they should not hinder cooperation."

Statements from the Chinese side, published by the Xinhua news agency, emphasized its readiness to “prioritize dialogue over confrontation.”
Amid recent trade conflicts and threats of new sanctions, Washington and Beijing are showing a cautious thaw.
China purchased its first shipment of American soybeans in months, which could be seen as a gesture of goodwill.

However, tensions in the tech sector remain high: the US continues to discuss restrictions on software and semiconductor exports to China.
The decision to reduce tariffs on fentanyl and sign an agreement on rare earth elements is a diplomatic move with a double meaning.

On the one hand, it signals de-escalation, but on the other, it cements interdependence in critical sectors: technology, energy, and supply security.
Written by Ethan Blake
Independent researcher, fintech consultant, and market analyst.

October 30, 2025

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