The United States will reduce tariffs on Chinese goods to 10% from 20%, President Donald Trump announced Thursday. The cut follows a summit with Chinese President Xi Jinping in South Korea. Trump said Xi promised to work hard to stop the flow of fentanyl into the US.
According to Reuters, Trump made the announcement aboard Air Force One while departing South Korea. He said the tariff was reduced because he believes China is taking strong action. The president described the meeting as amazing and said a great deal of decisions were made.
Trade and Rare Earth Agreement
China agreed to purchase tremendous amounts of US soybeans and other farm products starting immediately. The two countries also reached a one-year agreement on rare earths. Trump said the deal will be extended after a year.
The president stated that China will not impose rare earth controls. The US had imposed the 20% tariffs as punishment over the flow of fentanyl precursor chemicals. Beijing had sought the lifting of these tariffs among other matters.
Fentanyl Crisis Response
Fentanyl is a deadly synthetic opioid. It is the leading cause of American overdose deaths. Trump had said earlier he expects to reduce tariffs in exchange for Beijing curbing the flow of precursor chemicals used to make the drug.
Next Steps in US-China Relations
The tariff reduction represents a shift in US trade policy toward China. Trump made the announcement on the last leg of his Asia trip. The president spoke to reporters while traveling back to the United States.
The new 10% tariff rate cuts the previous penalty in half. This marks a significant change in the trade relationship between the two countries. The agreement ties economic policy directly to drug enforcement efforts.
China’s commitment to increase farm purchases offers immediate benefits to US agriculture. The rare earth agreement addresses supply chain concerns. These materials are critical for many technology and defense applications.
