U.S.–China Trade Truce: Tariffs Falling, Reciprocal Measures Suspended
U.S.–China Trade Truce: Tariffs Falling, Reciprocal Measures Suspended
The U.S. and China have reached a significant compromise at a critical leaders' meeting in Busan following an intense trade war that continued through 2025.
Following the meeting attended by Trump and Xi Jinping, the two sides agreed on a truce package that reduces tariffs, suspends investigations, halts reciprocal retaliation, and increases energy and agricultural purchases.
Fentanyl-linked tariffs reduced from 20% to 10%
According to an executive order issued by President Donald Trump, fentanyl-linked tariffs applied to certain products from China have been reduced to 20% → 10% levels.
The measure takes effect as of November 10.
China's Ministry of Commerce confirmed the reduction and announced that the U.S. will defer for one year planned increases in elevated reciprocal tariffs on China.
Period: through November 10, 2026.
Section 301 exemptions extended
According to a fact sheet released by the White House on November 1, the U.S. has also extended previously expiring Section 301 tariff exemptions through November 10, 2026.
According to a statement by USTR Jamieson Greer, despite the tariff reductions:
The total tariff burden on goods from China remains at approximately 47%
Some items can reach as high as 100%
Reciprocal investigations and shipping fees suspended for one year
The U.S. will suspend for one year its Section 301 investigation into China's maritime and logistics sectors.
As part of the same package, additional port fees applied by the U.S. to China-linked vessels will also be suspended for one year.
In return, China agreed to suspend its own retaliatory fees for the same period.
Rare earth controls deferred
China agreed to defer for one year the rare earth export controls it announced in October.
Additionally:
It will restructure rare earth export licenses
It will tighten chemical export controls to combat fentanyl supply chains
In return, the U.S. will suspend for one year national security-based export restrictions on certain firms with Chinese ownership of more than 50%.
Agricultural agreement: major purchase commitments
Trump announced via Truth Social that China will begin "tremendous" agricultural product purchases from the U.S.
White House details:
12 million tons of U.S. soybeans within two months
25 million tons of soybeans annually between 2026–2029
U.S. sorghum purchases are resuming
U.S. hardwood logs imports are also returning
China's Ministry of Commerce has not yet confirmed all of these details.
Nexperia production reopening
In addition to agricultural goods, China agreed to "take appropriate steps" to restart operations of Nexperia, a Netherlands-based but China-owned company, in China.
Agreement to be renegotiated annually
Both sides agreed that the truce package will be re-evaluated annually.
This means the agreement is not permanent, but rather provides short-term tension relief.
Xi Jinping: "Despite storms, we must stay the correct course"
At the Busan meeting, Xi stated:
"Our differences are normal. What matters is that the world's two largest economies manage their relationship in a stable manner."
This statement shows that China is inclined, at least in the short term, to lower tensions.
Key Points:
Fentanyl-linked tariffs reduced 20% → 10%.
Reciprocal tariff increases deferred for one additional year.
Rare earth export controls suspended for one year by China.
U.S. Section 301 maritime investigation suspended for one year.
China committed to major purchases of soybeans, sorghum, and hardwood from the U.S.
Total tariff burden remains at 45–47% levels.
The truce will be renegotiated annually.
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News Link: https://www.supplychaindive.com/news/us-china-trade-truce-donald-trump-xi-jinping-apec/804233/
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Author: SedatOnat.com
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