Historic breakthrough at the Trump-Xi meeting! Trump refers to the Chinese leader as a "great leader," and China and the US reach five major trade consensuses.

Chinese leaders held a highly anticipated meeting with U.S. President Donald Trump on Thursday in South Korea, which lasted 1 hour and 40 minutes, exceeding the original schedule by 40 minutes. In his opening remarks, Trump stated that the Chinese leader is “a great leader of a great country” and added that he believes the two will “maintain a good relationship for a long time,” with both sides reaching 5 major trade consensuses.

Trump-Xi Meeting's Five Core Consensus: Comprehensive Breakthrough on Tariffs and Rare Earths

(Source: X)

The Trump-Xi meeting lasted for 1 hour and 40 minutes, longer than originally planned. According to reports from China Central Television, the meeting was scheduled to conclude at 12:30 local time, but the actual extension indicates that the negotiations between both sides were in-depth and fruitful. The closed-door bilateral talks were held at the Jin Hai Air Force Base, where Trump revealed the significant outcomes of the discussions to reporters aboard Air Force One.

Trump-Xi Meeting Five Core Consensus:

Significant Tariff Reduction: Tariffs on China will be reduced from 57% to 47%, a decrease of 10 percentage points.

Rare Earth Trade Unblocked: All rare earth issues have been resolved, the rare earth trade is no longer hindered, and China will continue to export rare earths.

Fentanyl Comprehensive Cooperation: China agrees to fully curb the fentanyl issue, and the United States immediately reduces tariffs related to fentanyl.

Restart of Agricultural Product Purchases: China will immediately begin large-scale purchases of American soybeans.

Chip Procurement Discussion: China will negotiate chip procurement with companies such as Nvidia, but will not include Blackwell AI chips.

Trump told reporters on Air Force One: “If I were to rate this Xi-Trump meeting on a scale of 1 to 10, it would score a 12. Many decisions were made during the meeting, and conclusions will be drawn on some very important matters.” He stated that it was a “fantastic meeting,” and that the Chinese leader is “a great leader,” adding that both sides have “reached consensus on many important issues.”

The Chinese leader sat across the table from Trump, expressing great honor to hold the sixth meeting with the President of the United States. The Chinese leader stated that it is very natural for China and the United States to “not always agree,” and added that “it is also normal for the two major economies of the world to have friction from time to time.” “In the face of storms and challenges, you and I… must stick to the right course and ensure that the giant ship of China-U.S. relations sails steadily forward,” said the Chinese leader. “I have always believed that China's development is complementary to your vision of 'Making America Great Again.'”

Trump calls the Chinese leader a 'great leader' behind the diplomatic strategy

Trump stated in his opening speech that the Chinese leader is “a great leader of a great country,” a phrase that is extremely rare in the context of American politics and has sparked controversy. Supporters of Trump believe this is pragmatic diplomacy, facilitating substantive agreements by showing respect to the other party. Critics argue that this is an inappropriate praise of authoritarian leaders, undermining American values.

However, from the perspective of diplomatic effectiveness, Trump's strategy has indeed achieved results. This meeting between Trump and Xi is their sixth encounter, and Trump has consistently used the approach of establishing personal relationships to advance negotiations. He expressed after the meeting his belief that the two will “maintain a good relationship for a long time,” and this personalized diplomacy holds unique value in the great power competition between China and the United States.

The response from the Chinese leader is equally pragmatic. He acknowledged that “the two countries, China and the United States, cannot always be in agreement,” but emphasized that “it is normal for the two major economies of the world to have occasional friction.” This statement indicates that China is also willing to handle differences with a pragmatic attitude rather than becoming entrenched in ideological confrontation. The Chinese leader even stated that “China's development is complementary to your vision of making America great again,” a phrasing that is extremely rare in Chinese diplomatic language, showing that the Chinese leader is also actively conveying goodwill.

The interaction model between the two leaders has laid the foundation for substantial agreements at the Trump-Xi meeting. Diplomacy is not only about negotiating interests but also about managing relationships. Trump and the Chinese leaders have created a more favorable atmosphere for team negotiations by demonstrating mutual respect.

Dismantling Rare Earth Barriers: Key Breakthrough in Global Supply Chain

The removal of barriers to rare earth trade is one of the most important outcomes of the Xi-Trump meeting. Trump stated, “All rare earth issues have been resolved, and this is true for the entire world… This is a global issue, not just a problem for the United States. The obstacles from China have disappeared.” A U.S. official confirmed, “China will continue to export rare earths.”

Earlier this month, China announced a comprehensive export control system for rare earths and critical minerals, which are used in various technologies ranging from iPhones to hypersonic weapons, leading to a sharp escalation in tensions. China monopolizes the processing of critical minerals and has strengthened controls over rare earth exports in recent weeks, triggering panic in the global supply chain.

Rare earths include 17 chemical elements and are crucial for the manufacturing of electric vehicles, wind turbines, smartphones, military equipment, and high-tech products. China controls about 90% of the global rare earth processing capacity, and this monopoly position gives it significant leverage in trade negotiations. Although the United States also has rare earth mineral deposits, its processing capacity is severely lacking and it is highly reliant on Chinese supply.

China has also expressed its willingness to postpone the implementation of the new rare earth export control system for one year. This concession shows that China recognizes that completely cutting off rare earth supplies could trigger a collapse of the global supply chain, ultimately harming China's own exports and economic interests. By delaying the implementation for a year, both sides have time to explore alternatives or establish more sustainable cooperation mechanisms.

Chips, TikTok, and Future Visit Arrangements

On the chip issue, Trump stated that both sides did discuss chips, and China will negotiate chip procurement with Nvidia and other companies, but there was no discussion about Nvidia's Blackwell chip. Prior to the meeting, Washington speculated that Trump might approve the export of highly advanced Nvidia chips to China, which would raise widespread concerns among hawks on Capitol Hill regarding China.

German Marshall Fund's China expert, Craig Allen, stated: “In order to reach an agreement, Trump may ultimately make some concessions that undermine his 'Make America Great Again' (MAGA) agenda and put China in a more favorable position. If the U.S. lifts some export restrictions on advanced chips and agrees to provide China with NVIDIA's Blackwell B30A chips, the U.S. will lose its computational advantage and jeopardize its leading position in the field of artificial intelligence.”

However, Trump clearly stated that the Blackwell chip is not under discussion, indicating that the United States maintains a red line on core AI technology. This balancing strategy—opening up some chip procurement while protecting the most advanced technologies—shows both a willingness to cooperate and preserves strategic advantages.

U.S. and Chinese officials hinted at some aspects of the agreement, including Beijing's approval for U.S. investors to control the popular U.S. short video app TikTok. Analysts expect that a final agreement on the sale of TikTok's U.S. operations, owned by a Chinese company, will bring some stability to an otherwise turbulent competitive landscape.

The future exchange program shows the continuous improvement of the relationship between both sides. Trump stated that he will visit China in April, and the Chinese leaders will visit the United States afterwards, possibly going to Washington, D.C. or Palm Beach, Florida. Trump also mentioned that the United States and China will “work hand in hand” on the Ukraine issue. This is a one-year agreement that will be extended.

The profound impact of the Trump-Xi meeting on the global market

The summit was held six months after Trump imposed a 145% tariff on Chinese goods, and Chinese leaders retaliated with a 125% tariff on American products. U.S. Treasury Secretary Scott Bessen described this situation as a de facto trade embargo. Earlier this week, Bessen stated that this preliminary agreement might allow both countries to extend the deadline of November 10, when their current trade truce agreement expires.

Earlier today, the Chinese stock market reached its highest point in ten years, indicating that investors are optimistic about the Trump-Xi meeting. The Chinese benchmark Shanghai Composite Index has risen over 2% in the past five days, reaching a high of 4025.39 points in today's morning session. Global markets have generally risen this week as Chinese and U.S. officials attempt to ease trade tensions.

The US dollar index (DXY) has fallen below 99.00, and this weakening of the dollar is generally favorable for risk assets and cryptocurrencies. Before the talks, the Chinese Foreign Minister made positive remarks, stating that Beijing “is willing to work with the US side to strive for positive results in this meeting.” According to China's official news agency Xinhua, the accompanying personnel for the Chinese leader's visit include his chief of staff Cai Qi, Foreign Minister Wang Yi, and the economic czar He Lifeng, who is responsible for negotiating trade agreements with the United States.

Glaeser stated that the best scenario would be for the leaders of the two countries to reach an agreement, thereby bringing “a certain degree of stability” to the bilateral relations, but he also warned that even such an agreement may not be lasting. Shortly before the summit, Trump indicated that he had instructed the Pentagon to resume U.S. nuclear weapons testing. Before the private meeting with the Chinese leader began, reporters asked Trump about this move, and Trump declined to comment.