Trump reduced tariffs on China, reached agreement with Chinese President

(Patria) - US President Donald Trump stated on Thursday that he agreed with Chinese President Xi Jinping to reduce tariffs on China in exchange for Beijing curbing illegal fentanyl trade, continuing to buy American soybeans, and maintaining exports of rare earth metals.

Trump's personal talks with Xi in the South Korean city of Busan, the first since 2019, marked the finale of the US President's trip to Asia, during which he also praised trade breakthroughs with South Korea, Japan, and Southeast Asian countries.

- I think the meeting was incredible - Trump told reporters on Air Force One shortly after leaving Busan, rating the talks as "12 out of 10".

Trump said tariffs imposed on Chinese imports would be reduced from 57 percent to 47 percent by halving the tariff rate related to the trade of fentanyl precursors from 20 percent to 10 percent.

Xi will "work very hard to stop the flow" of fentanyl, a deadly synthetic opioid that is the leading cause of overdose deaths in America, Trump said. The tariff was reduced "because I believe they are truly taking strong measures," he added.

Global stock trading was volatile as Trump revealed details of the deal, with major Asian indices and European futures oscillating between gains and losses. China's Shanghai Composite Index (.SSEC) fell from a 10-year high, while US soybean futures were weaker.

- Currently, price movements create the impression that much has already been factored into the price - said Kyle Rodda, senior market analyst at Capital.com in Melbourne.

- It is possible that markets were hoping for a complete abolition of tariffs on fentanyl, so that could explain the ambivalence in the markets - he said.

Only India and Brazil remain subject to higher tariff rates among the US's main trading partners.