U.S. President Donald Trump said he expects to lower fentanyl-linked tariffs on China as Beijing confirmed a high-stakes meeting between Chinese President Xi Jinping and the American leader.
A spokesperson for Chinese Foreign Ministry said Wednesday that Xi will meet Trump in Busan, South Korea, on Thursday to exchange views on issues of shared concerns, without elaborating.
“We are willing to work with the U.S. to push the meeting toward achieving positive outcomes,” the spokesperson said in Mandarin, translated by CNBC.
Earlier on Wednesday, Trump told reporters aboard the Air Force One that fentanyl flows into the U.S. and “farmers” will be among topics he expects to discuss with Xi on Thursday.
When asked whether the potential one-year pause in Beijing’s implementation of rare earth export controls would be enough to draw more concessions from the U.S., Trump said “we haven’t talked about the timing yet but we are gonna work out something.”
The two leaders’ meeting — their first in-person sit-down since Trump’s return to the office in January — comes as bilateral tensions have escalated in recent weeks. Beijing has turned up the heat on rare earth export controls, while Washington has retaliated with port fees on Chinese ships and threatened software-related export restrictions.
A delicate trade detente between the world’s top two economies that includes lower tariffs on each other’s goods is nearing its expiration on Nov. 10, if they fail to agree on another extension. Trump has also threatened additional 100% tariffs on Beijing starting Nov. 1.
The Wall Street Journal on Tuesday reported that the U.S. could cut the 20% fentanyl-related tariffs on Chinese exports by half, in return for Beijing’s crack down on the export of chemicals that make fentanyl. If Washington were to lower those tariffs to 10%, that would bring the average duty on most Chinese imports — currently around 55% — to about 45%.
On whether Taiwan would be on the agenda, Trump said “I don’t know if we’ll even speak about Taiwan. He may want to ask about it. There is not that much to ask about it.”
Answering a question about exports of Nvidia’s Blackwell chips to China, Trump said “I think we may be talking about that with President Xi.”
In a speech at the Asia-Pacific Economic Cooperation, or APEC, summit on Wednesday, Trump said that he hoped to reach an agreement with Xi, which will be “a good deal for both.” The U.S. will also finalize a trade agreement with South Korea “very soon,” he added.
Chinese President Xi will also deliver a speech at the summit and hold bilateral meetings with foreign leaders, a spokesperson of the ministry said last Friday.
The U.S. president kicked off his whirlwind Asia trip on Sunday, signing a flurry of trade and mineral agreements with Southeast Asian leaders and most recently Japan.
Likely outcomes from the Trump-Xi meeting include Beijing’s guarantee of ensuring the U.S. access to rare earth items under its export-control measures, purchases of Boeing aircraft, approval for the sale of TikTok’s U.S. operation and more efforts on curbing fentanyl flows, according to Neo Wang, China strategist at Evercore ISI.
In return, the U.S. could offer to loosen export controls on certain semiconductor equipment and AI chips, roll back the 100% tariff threat, in addition to a reduction of 10 percentage points in the fentanyl-linked tariffs, starting from Nov. 10 as part of a renewed tariff truce, Wang said.
“We expect Beijing to give Trump a way out on the fentanyl deadlock, such as via a new promise from Xi in person, to facilitate Trump’s reduction on China fentanyl tariff, effective no later than Nov. 10,” Wang added.
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