When Xi Jinping walked out of his meeting with President Trump on Thursday, he projected the confidence of a powerful leader who could make Washington blink. The outcome of the talks suggested that he succeeded.
By flexing China’s near monopoly on rare earths and its purchasing power over U.S. soybeans, Mr. Xi won key concessions from Washington — a reduction in tariffs, a suspension of port fees on Chinese ships and the delay of U.S. export controls that would have barred more Chinese firms from accessing American technology. Both sides also agreed to extend a truce struck earlier this year to limit tariffs.
“What’s clear is they have become increasingly bold in exerting leverage and they are happy to pocket any and all U.S. concessions,” said Julian Gewirtz, who was a senior China policy official at the White House and the State Department in President Joseph R. Biden Jr.’s administration.
Sounding almost like he was delivering a lecture, Mr. Xi said to Mr. Trump that the “recent twists and turns” of the trade war should be instructive to them both, according to a Chinese government summary of Mr. Xi’s remarks at the meeting in Busan, South Korea.
“Both sides should consider the bigger picture and focus on the long-term benefits of cooperation, rather than falling into a vicious cycle of mutual retaliation,” Mr. Xi said.
By twists and turns Mr. Xi was likely referring to the last several months, or nearly a year, of tit-for-tat retaliatory measures in the form of tariffs, sanctions and export controls. Earlier this month, China escalated dramatically, strengthening its hand by announcing sweeping new limits on the sales of on rare earths, critical minerals that are needed for almost all modern technology. Cutting off their supply could cripple U.S. industries.
Mr. Xi’s message seemed to be: Beijing had proven its capacity to hit back and Washington would do well to remember it.
“After Trump launched his trade and tariff war, China was the only country that matched the United States blow for blow,” said Zhu Feng, a professor of international relations at Nanjing University, noting that the biggest win for China could be that the United States might think twice before imposing new measures on China.
“If Trump had forced China to implement its complete export controls on rare earths, it would have been a lose-lose situation for both sides,” he said.
At the same time, Mr. Xi also seemed to grasp what Mr. Trump needed, a deal that he could sell as a victory at home. The outcome allowed Mr. Trump to claim a win for American farmers and companies, even though China had largely restored the status quo by agreeing to buy soybeans and to hold off on further restricting the export of rare earths.
Mr. Trump pumped a fist in the air as he boarded Air Force One, then said on the plane that Mr. Xi had agreed to take more action to stop the flow of chemicals used to make fentanyl from reaching the United States. He also said that China promised to purchase more U.S. soybeans. “Our Farmers will be very happy!” he posted on Truth Social afterward. “I would like to thank President Xi for this!”
After the two leaders met, China’s Ministry of Commerce said in a statement that it would suspend for one year the restrictions on rare earths that were announced in October. (The ministry made no mention of earlier controls announced in April.)
Separately, Mr. Trump said he would cut in half the 20 percent tariffs he had imposed on Chinese goods to pressure China to do more to stop fentanyl trafficking. The reduction announced on Thursday brings overall tariffs on Chinese goods to around 47 percent from 57 percent, he said. The Chinese commerce ministry also said the two sides had agreed to a one-year extension of a truce to limit additional tariffs that was originally set to expire on Nov. 10.
Some experts said China inevitably had the upper hand in the trade fight because the Trump administration never had a clear objective.
“I think its an approach that can safely be described as tactics without a strategy,” said Jonathan Czin, a fellow at the Brookings Institution who previously analyzed Chinese politics at the C.I.A.
“Ostensibly, the goal was to address some of the meaty trade issues that had long bedeviled the relationship. Instead, the P.R.C. side has successfully orchestrated a game of ‘whack-a-mole’ for the Trump Administration,” Mr. Czin said, using the abbreviation for the People’s Republic of China.
Still, in a potential concession by Beijing, China’s official summary of the meeting did not mention Taiwan, the island democracy that Beijing claims. It is a topic that Chinese leaders usually bring up when meeting their U.S. counterparts to pressure Washington to dial back U.S. support for the island.
The agreements struck on Thursday could mean at least a temporary calm in the fractious U.S.-China relationship. Mr. Trump said the two leaders also discussed “working together” to end the war in Ukraine. He said he would travel to China in April and Mr. Xi would visit the United States after that.
Mr. Xi also played to Mr. Trump’s preference for personal rapport by appealing to Mr. Trump’s domestic agenda, saying that he believed China’s development “goes hand in hand” with the president’s “vision to ‘make America great again.’” Mr. Trump, for his part, flattered Mr. Xi, calling him “a great leader of a great country” and a “great friend.”
“It’s a personalized style of diplomacy that plays well to both leaders’ instincts,” said Lizzi C. Lee, a fellow focusing on the Chinese economy at the Asia Society Policy Institute. “For now, these gestures of good will seem to set the tone for a period of managed stability.”
Still, any progress made on Thursday could easily be erased by moves on either side that are interpreted as violating the agreement. A deal struck last month was almost undone when the U.S. expanded the range of companies banned from accessing U.S. technology, which would have affected many Chinese companies. China then announced its export controls on rare earths. That prompted Mr. Trump to threaten to call off Thursday’s meeting and to impose yet more tariffs on Chinese goods.
In the absence of a finalized agreement, it is unclear how long the current détente will last.
“Maybe I’m jaded because I’ve seen this movie too many times, but these are issues that are relatively easy to roll back and also to accuse the other side of bad faith,” said Ja Ian Chong, a professor of political science at the National University of Singapore, about the state of the truce.
Thursday’s progress threatened to be overshadowed by an announcement that Mr. Trump made just before the meeting. He said that the United States would resume nuclear weapons testing for the first time in more than three decades. But Mr. Trump seemed to suggest on Air Force One that the move was not directed at China, and analysts said it was not clear that Mr. Xi would see it as a provocation.
More important, experts in China said, is that the American president is focused on working with China.
“If Trump truly wants to implement something, if he wants to go east, his staff wouldn’t dare go west,” said Xin Qiang, a U.S.-China expert at Fudan University in Shanghai.
Pei-Lin Wu contributed reporting.