Trump, Xi reach deal to cut tariffs and boost trade

illuminem summarises for you the essential news of the day. Read the full piece on Deutsche Welle or enjoy below:

🗞️ Driving the news: In a significant move to ease trade tensions, US President Donald Trump and Chinese President Xi Jinping reached an agreement that will see the US reduce tariffs on China from 57% to 47%
•  In exchange, China has committed to ensuring the continued flow of rare earth exports, purchasing large quantities of US soybeans, and taking stronger action against fentanyl trafficking
•  This deal is set to last for at least one year, marking a milestone in the US-China trade relationship

🔭 The context: The US-China trade war has long disrupted global trade, with tariffs and retaliatory measures affecting industries across both countries
• The agreement between Trump and Xi follows months of negotiation and discussions between trade officials
• This is the first in-person meeting between the two leaders since 2019, taking place at the APEC summit in South Korea, after earlier efforts to find common ground had stalled
• Both sides have faced economic pressures due to tariffs, especially in sectors like agriculture, where US soybean farmers have been hit particularly hard

🌍 Why it matters for the planet: The deal aims to restore stability in the global economy by reducing trade barriers between the world’s two largest economies
• It could alleviate some of the strain on global markets, particularly in the agriculture and rare earth industries
• However, the long-term effectiveness of the agreement will depend on China’s ability to meet its commitments, especially concerning rare earth supply, which is crucial for technologies like electric vehicles and renewable energy infrastructure
• Additionally, the crackdown on fentanyl trafficking addresses a major public health crisis, particularly in the US, where fentanyl-related overdoses have reached alarming levels

⏭️ What's next: The implementation of this deal will likely be monitored closely, with the potential for renegotiation in a year
• The US is expected to continue advocating for China’s compliance with the agreed measures, particularly in terms of rare earths and fentanyl
•  While the immediate effects may boost markets and offer temporary relief to industries like US soybean farming, both nations will need to address underlying trade imbalances and structural issues that have contributed to ongoing tensions

💬 One quote: “China and the US can jointly shoulder our responsibility as major countries and work together to accomplish more great and concrete things for the good of our two countries and the whole world.” – Xi Jinping

📈 One stat: The US agricultural sector, particularly soybean farmers, faced a $3 billion drop in trade with China during the first half of 2025 compared to the previous year.

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