Tomorrow, Friday, October 31, at 10 AM ET I will host a Sinocism Live chat with Ruixue Jia and Hongbin Li about their new book The Highest Exam How the Gaokao Shapes China.
Déjà vu all over again…I think that is how Yogi Berra would describe this latest pause/truce/caesura in the long-term competition between the US and China. I also think we saw some of this movie back in Trump’s first term, but maybe I have just been writing this newsletter for too long…
The Trump-Xi meeting in South Korea went as well as could have been hoped, both sides pulled back some of their recent actions and threats, with the most meaningful move a PRC suspension in enforcing the expanded rare earths-related export controls for a year, in exchange for the US pulling back on the expanded BIS 50% Entity List. That I believe is the first time that the US has agreed to concede on its export controls in a trade negotiation with the PRC, in a sign of just how effective those rare earths-related export controls are.
President Trump agreed to reduce the 20% fentanyl-related tariffs to 10% so I believe the effective US tariff rate on PRC goods is somewhere around 47%, still very high but more manageable for the PRC.
The PRC made the easy decision to start buying US soybeans again, with a commitment to buy next year almost as many as they bought in a year during the first Trump administration.
The two sides agreed on summits next year, with Trump planning to go to China in April and Xi to visit the US later in 2026. Planned summits usually help stabilize the relationship as both sides are working towards ensuring their top leaders have a successful meeting.
No one should be under illusions that this latest pause marks a fundamental improvement in US-China relations; just go read what we know so far about the forthcoming 15th Five-Year Plan to see how the PRC side is preparing for a long-term struggle with the US.
The Ministry of Commerce detailed the outcomes from the meeting:
The U.S. side will cancel the 10-percent so-called “fentanyl tariffs” and suspend, for an additional year, the 24-percent reciprocal tariffs levied on Chinese goods, including goods from the Hong Kong Special Administrative Region and the Macao Special Administrative Region, according to a spokesperson of the ministry.
China will make corresponding adjustments to its countermeasures against the aforementioned U.S. tariffs, the spokesperson said, noting that both sides have agreed to continue extending certain tariff exclusion measures.
The United States will suspend for one year the implementation of a new rule announced on Sept. 29 that expands its “entity-list” export restrictions to any entity that is at least 50 percent owned by one or more entities on the list. China will suspend the implementation of relevant export control measures announced on Oct. 9 for one year and will study and refine specific plans, the spokesperson said.
The U.S. side will suspend the implementation of measures under its Section 301 investigation targeting China’s maritime, logistics and shipbuilding industries for one year. In response, China will correspondingly suspend the implementation of its countermeasures against the U.S. side for one year once the U.S. suspension takes effect, according to the spokesperson.
In addition, the two sides also reached consensus on issues including anti-drug cooperation on fentanyl, expanding agricultural product trade, and the handling of individual cases involving relevant enterprises, according to the spokesperson.
Both sides further confirmed the outcomes of the Madrid economic and trade talks. The U.S. side made positive commitments in areas such as investment, and China will properly resolve issues related to TikTok with the U.S. side.
There was no mention of Taiwan in the PRC readout or in Trump’s Truth Social post about the meeting.
There was no agreement around selling advanced Nvidia chips to China, though after the meeting President Xi did say that Nvidia and China would have further discussions.
Earlier today I spoke with
, the C.V. Starr senior fellow for Asia studies and director of the China Strategy Initiative at the Council on Foreign Relations (CFR) and an assistant professor in Georgetown’s School of Foreign Service. Rush was deputy senior director for China and Taiwan on President Biden’s National Security Council (NSC), where he served from 2021 to 2024 and helped manage the NSC’s first China directorate, and so has a lot of experience working leader-level engagements, and has been in the room on multiple occasions.You can watch the conversation here or listen to it in your Sinocism podcast feed. I think it is a really useful deep dive into the South Korea meeting and the state of the US-China relationship.