World

US and China agree to tariff truce, pausing trade war escalation

Oct 31, 2025 United States

In their first in-person meeting in six years, US President Donald Trump and Chinese President Xi Jinping reached a trade truce, halting the recent escalation of the trade war over rare earth elements

Following their much-anticipated meeting in South Korea, which concluded President Trump’s five-day trip to Asia, the leaders from both countries agreed to a tactical trade truce, marking a pause in the escalating tariff dispute.

As part of the agreement, China will implement a one-year pause on sweeping export controls on rare earth elements, which had recently exacerbated tensions. This gives the US a temporary reprieve from controls that could endanger supply chains for mobile phones, fighter jets, and many other products.

In return, the US will immediately cut tariffs on Chinese goods related to fentanyl from 20% to 10%, reducing the overall US tariff rate on Chinese goods to around 47%. This de-escalation has successfully averted the 100% tariffs on Chinese imports that the Trump administration had threatened to impose on the 1^stof November.

The US will also suspend for one year an investigation into China’s shipbuilding sector and a rule that would have extended export control regulations to companies’ subsidiaries, according to China's Commerce Ministry.

“I would say on a scale from 1 to 10, with 10 being the best, I would say the meeting was a 12,” Trump told reporters as he departed on Air Force One. He also thanked Xi for the “truly great” meeting in a Truth Social post from the air.

According to an official Chinese readout, President Xi emphasised the need for stability in US-China relations. He urged both countries to prioritise long-term cooperation over a “vicious cycle of mutual retaliation”. He also proposed expanding cooperation into new areas, such as infectious diseases, artificial intelligence, and illegal immigration.

“We have a deal,” Trump said. “Now, every year we’ll renegotiate the deal, but I think the deal will go on for a long time, long beyond the year. But all of the rare earth has been settled, and that’s for the world”.

Image Credits: deccanchronicle.com/

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