global-premiun.econoday.com | Updated: 2025-10-30

President Trump describes meeting with China's President Xi as a 12 on a scale of 1 to 10. Chinese officials give a more muted account. Actual terms of the agreement do cool the trade war, largely as markets expected, and the tenor of the meeting suggests the two sides want to avoid big flareups. It's positive for the global economy relative to the prospect of a collapse in the talks and escalation of the dispute. On the other hand, the sense of fragility and unpredictability remains intact.

After the Trump-Xi talks, the two sides declare a one-year truce in the trade war as they extend limits on tariffs that would have expired on Nov. 10. Trump will cut tariffs on China by 10 percent. Big tariffs remain in place, at 47 percent on average. That's better for trade than higher tariffs but it imposes a heavy burden on US importers. The US delays for a year plans to expand the number of Chinese firms subject to limits on access to US technology including semiconductors. It's not clear what happens with sales of Nvidia's most sophisticated chips to China but Trump appears to be in a giving mood. The two leaders plan more meetings where Trump gets to pursue his improvisational deal-making style.

For its part, Trump says China pledges "strong" effort to cut flow of chemicals for making fentanyl to the US, to allow more exports of rare earths to the US, and to resume purchases of soybeans. The latter can be readily measured. So Trump can head home and claim a great outcome that will help with key US constituencies like farmers while US firms retain access to rare earths for now.