China and the United States have reached a tentative agreement to ease tensions in their ongoing trade war, marking a significant development in the longstanding dispute between the world’s two largest economies. The agreement, reached during a meeting between Presidents Donald Trump and Xi Jinping in South Korea, aims to reduce tariffs and promote cooperation on key issues such as trade, technology, and security.
The trade war, which began in 2018, has been characterized by a series of tit-for-tat measures, including tariffs on billions of dollars’ worth of goods. The United States has imposed tariffs on Chinese goods, citing concerns over intellectual property theft and unfair trade practices. China has retaliated with its own tariffs on American products, including soybeans and other agricultural goods.
Under the new agreement, the United States will reduce tariffs on Chinese goods by 10 percent, effective November 10. China has agreed to make corresponding adjustments to its own tariffs on US goods. The move is expected to bring down the average US tariff on Chinese goods to around 45 percent, still a significant barrier to trade between the two countries.
The agreement also addresses the issue of fentanyl, a potent opioid that has been at the center of a deadly epidemic in the United States. China, the primary source of precursor chemicals used to make fentanyl, has agreed to crack down on illicit shipments. The United States has reduced its fentanyl-related penalty on Chinese goods from 20 percent to 10 percent.
In addition, the two countries have reached a tentative agreement on the supply of rare earths, critical minerals used in the production of defense, automotive, and consumer electronics. China, which dominates the global supply of rare earths, has agreed to issue export licenses for these minerals, as well as other critical materials such as gallium and graphite.
The agreement also touches on the issue of export controls, with the United States agreeing to suspend its latest expansion of restrictions on Chinese firms. However, experts note that the underlying structural issues driving the trade tensions between the two countries remain unresolved.
Other key areas of agreement include the purchase of American soybeans by China, with Beijing committing to buy at least 12 million metric tons of US soybeans in the last two months of 2025. The two countries have also made progress on the issue of TikTok, the popular social media app owned by Chinese parent company ByteDance, with a framework for a deal to transfer the app’s US operations to American ownership.
The agreement marks a significant step forward in the trade relationship between the United States and China, but experts caution that much work remains to be done to resolve the underlying issues driving the tensions. The deal is expected to have significant implications for businesses and industries on both sides of the Pacific, and its impact will be closely watched in the coming weeks and months.