Transcription
Welcome everyone. Thank you for joining me.
This week in South Korea, a long-awaited meeting between US President Donald Trump and Chinese President Xi Jinping has produced what many are calling a limited truth in a long and very bitter trade conflict. The two leaders reached a very modest agreement, one that reduces some tariffs and resumes the flow of American soybeans to China, but it leaves a broader comprehensive deal still far out of reach. Trump described the talks with Xi as amazing and he rated it 12 out of 10. But let's remember 90% of what we saw and what we heard in the mainstream media is simply geopolitical posturing.
I've uploaded several interesting videos from the meeting over on my Telegram. For those who would like to stay updated throughout a day, it would be a great resource. I'm very, very active on Telegram. I will link it below.
But Western media's take on the meeting was quite remarkable, actually. Take a look. CNN here says China wins whatever the outcome. The New York Times calls it a major victory for Beijing. The Guardian says America was the bully getting rightfully bullied back. And the Financial Times acknowledges that China is a peer rival. So, with all things considered, perhaps this wasn't a 12 out of 10 meeting after all.
Now let's focus on the key takeaways. First, Xi Jinping began the meeting by voicing his support for US-China bilateral dialogue. He said the countries can and should peacefully support each other and that not seeing eye to eye is quite normal in foreign affairs. He also emphasized normalization of ties between the United States and China despite ongoing trade disputes. "Given our different national conditions, we do not always see eye to eye with each other. And it is normal for the two leading economies of the world to have frictions now and then. You and I at the helm of China-US relations should stay the right course and ensure the steady sailing forward of the giant ship of China-US relations. I always believe that China's development goes hand in hand with your vision to make America great again. Our two countries are fully able to help each other succeed and prosper together."
Many observers pointed out the rather reserved reaction of President Xi Jinping when the two leaders shook hands. As you can see here, virtually no emotions on Xi's face that you can read. At least unlike Trump's body language, Trump is very, very animated here.
Trump announced that he will cut tariffs on Chinese goods by 10% in exchange for Beijing agreeing to restart purchases of US soybeans and also agreeing to keep rare earth minerals flowing to American industries. "As you know, I put a 20% tariff on China because of the fentanyl coming in, which is a it's a big tariff. And based on his statements today, I reduced it by 10%."
So, the meeting that was held during the APEC summit appeared cordial but very, very cautious. The two leaders spoke for about 2 hours in their first face-to-face meeting in six years. Trump praised Xi as a great leader of a great country. He gave him multiple compliments. And Xi Jinping said that China's development and America's MAGA agenda were not incompatible goals. So he was very positive um about the prospects of developing a more normalized relations with the United States.
But behind the diplomatic pleasantries lies a complex web of economic and geopolitical trade-offs. The heart of the deal revolves around some key concessions. First, Washington agreed to suspend the controversial 50% rule, which is a measure that was introduced in September that massively expanded the number of Chinese companies blacklisted under US sanctions. The rule had effectively barred over 20,000 Chinese firms from accessing Western financial systems. And in return, Beijing will suspend its export controls on rare earth minerals for one year. So, the United States will have access to materials that are vital for US defense, tech, and EV industries.
The second point I would like to make uh has to do with the tariffs. So, Trump confirmed that overall tariffs on Chinese goods would fall to roughly 47%. This is a remarkable climb down from the 125% uh tariff that was uh of course announced during the liberation day and uh that was indeed a roller coaster. So, in effect, China clearly won this round when adjusted for prior duties and the partial roll back of the fentanyl tariff. Analysts estimate that China will now face effectively a 16% tariff, which is roughly on par with the United States uh tariff on the European Union and South Korea.
With respect to the reported pause on China's export control of rare earth elements, the official Chinese readout of the meeting omits mentioning rare earth export controls. So, it is not quite clear what the actual result of the meeting is, but it is fair to question whether the pause on rare earth was even discussed. Um, and we will just have to wait for further announcements from official channels to verify whether there is a pause or uh, you know, what the duration is, whether it is indeed for one full year.
The third point is that both countries agreed to pause their escalating maritime disputes, and this is an important one. The United States will suspend new sanctions and port fees targeting China's shipbuilding and logistics industries, and Beijing in turn will hold its own port charges against US vessels. For now, this does signal a temporary reprieve in what had been an emerging shipping confrontation on top of everything else between the United States and China.
The fourth point has to do with both sides pledging to resume agricultural trade. And this is also a very important one because it directly benefits Trump's base. Specifically, China's massive soybean imports from the United States will now resume. So, again, in essence, the United States will now get their farmers back in business after China, of course, had switched to Brazil and Venezuela for soybeans earlier this year.
China's Ministry of Commerce in its official statement described the talks as constructive and said that both sides reached consensus on expanding agricultural product trade and handling enterprise issues appropriately. And that final phrase, "handling enterprise issues," is thought to reference ongoing disputes involving major companies like Huawei, Nvidia, and Nexperia, which I have an entire video here on my channel about Nexperia and the Dutch government's uh illegal seizure of its uh of its assets. So, take a look if you're not familiar.
So, with all of that being said, was this a truly historic meeting? I would say that it did not yield any breakthrough results. Trump, for his part, said that he plans to visit China in April of 2026, and he will later host Xi Jinping in the United States. He also described the meeting as a 12 out of 10, as I mentioned, and he said that "we're going to have a great relationship for a long time with China." But that's a sales pitch and uh, of course, sales tactics. The reality remains far more measured and uncertain.
What we saw in Busan was something new. It was more of a reciprocal arrangement with the United States likely recognizing that it can no longer dictate. It cannot actually control the terms of the bilateral relations and uh, of course, it recognized that the United States is not really calling the shots, if you will. Still, major fault lines do remain. The agreement does not address deeper issues such as Taiwan, artificial intelligence uh exports, or the broader technology war between the two nations. The TikTok dispute remains unresolved at this time, with both sides merely promising to properly handle it in the future. And uh, even though Trump suggested that there is a comprehensive deal and uh he said that there's one coming soon, he did admit that negotiations will continue for a long time. So, clearly, he didn't really reach the point that he was hoping to, and uh, of course, we saw that China was very much in a driver's seat there.
For now, the takeaway is very clear. Trump and Xi have not ended the trade war. They may have pressed a pause. The United States has softened the tariffs. China, allegedly based on US media coverage, had lifted key restrictions on rare earth minerals, and both sides have agreed to talk again face-to-face within months. So, that could be a positive positive outcome.
I would say that it is quite notable that the United States and China did not discuss crude trade with Russia, uh, which Trump, of course, would have normally brought up as leverage. But instead, it was very clear who was running the show, and it wasn't the US delegation. And perhaps that's why Trump decided not to bring up uh China's crude oil trade with Russia to uh to make it any worse than it was.
Thank you very much for watching. I hope that you enjoyed this quick update, and I also hope that you consider supporting my work. Become a subscriber on YouTube, Substack, on Patreon. You will find them linked below. Have a great rest of your day, and I will see you back here tomorrow. Bye for now.