Tariffs to Drop on China by 10 points; Ship Fees Also Lifted

China agreed to delay an extraterritorial export licensing regime for goods containing rare earths of Chinese provenance, and in return, the U.S. agreed to stop enforcing a Commerce Department Entity List expansion for majority-owned subsidiaries.

Trump called the 100-minute meeting a 12 out of 10 on the plane back to the states, and wrote on Truth Social, "We agreed on many things, with others, even of high importance, being very close to resolved."

China ended its soybean boycott, Treasury Secretary Scott Bessent said on Fox Business News, promising to buy 12 million metric tons during this season, between now and January, and then for the next three years, a minimum of 25 million metric tons per year.

According to USDA, China bought about 27 million metric tons of American soybeans in 2024. Its peak year of sales to China, in dollars, was in 2022, but prices were unusually high that year.

"I was extremely honored by the fact that President Xi authorized China to begin the purchase of massive amounts of Soybeans, Sorghum, and other Farm products," Trump wrote. "Our Farmers will be very happy!"

China's Xinhua news agency said President Xi Jinping told Trump, "In the face of winds, waves and challenges, we should stay the right course, navigate through the complex landscape, and ensure the steady sailing forward of the giant ship of China-U.S. relations."

Xi said the trade teams had reached consensus on solving various issues, but asked them "to work out and finalize the follow-up steps as soon as possible, and ensure that the common understandings are effectively upheld and implemented... ."

He said the two sides "must not fall into a vicious cycle of mutual retaliation," but rather shorten the list of problems.

Analysts pointed to the fact that so far, there are just oral understandings, as well as the recent history of each country interpreting the other's actions as attacks or not sticking to commitments, and said this truce may not be durable.

Asia Society Policy Institute Managing Director Rorry Daniels wrote, "Presidents Trump and Xi succeeded in stemming the active bleeding in the relationship, but whether the bandage will stick remains to be seen.

"The structure of a year-to-year agreement suggests that continuous negotiation will be a feature of U.S.-China relations moving forward, with all the associated market and political volatility we have seen over the last six months."

Atlantic Council GeoEconomics Center Senior Director Josh Lipsky wrote that "many of these wins just get us back to where we were before the U.S.-China trade wars of the spring. In fact, China still faces higher tariffs than it did when Trump came into office. And many of the most difficult issues in the relationship were left to be discussed another day. But will that day come? As we’ve seen over the past six weeks, it only takes one misstep or misinterpretation on either side for another round of tit-for-tat escalation and a full-blown trade war between the world’s largest economies."

ASPI Vice President Wendy Cutler noted that China convinced the U.S. to end the shipping fees, saying it was part of a trend of Beijing driving a hard bargain.

"This is in sharp contrast to the other trade agreements that Trump has concluded in recent days, which were heavily tilted in the U.S. favor. Trump has met his match with China, which has shown that two can play at this game," she wrote. She said U.S. tariff threats are less credible after China's use of its leverage over rare earths.

Treasury Secretary Scott Bessent downplayed the significance of the end of the Section 301 action on Chinese shipbuilding, saying that China already had substantial decreases in their order books even before the fees started, just because of the pending investigation. He said Korean know-how and investment is "going to bring shipbuilding back to the U.S."

Sen. Todd Young, R-Ind., a leading voice for the need to restore domestic shipbuilding, said he wasn't disappointed in the reversal on fees. "My big picture focus is on making sure that the cost structure for U.S. ship manufacturing and U.S. shipping changes. Tariffs can, and fees on ships coming into our country, of course, could help change that cost structure. But there are other tools as well." He said he's looking ahead to the administration's maritime strategy, expected in a month.