US-China trade – Xi and Trump put a lid on trade tensions once again

Danske Research Team Danske Bank A/S

The meeting between Trump and Xi did not contain any surprises after the framework deal was revealed over the weekend. China achieved reduction in Fentanyl related tariffs while Trump secured soybean exports being resumed and China delaying its' export controls by at least a year.

It is positive the two sides are able to de-escalate tensions quick and provide calm back into the global trading system. We expect to see more bumps on the road, but the two sides will try not to rock the boat ahead of Trump's China visit in April.

With tariffs on China coming down, it narrows the gap to other Asian countries and could lead to a recovery in Chinese exports to the US and a rewidening of the trade deficit.

What did Trump and Xi agree on?

Below a short overview of what was agreed based on media reports:

US fentanyl related tariffs on China cut from 20% to 10%
China delays export controls on rare earths by a year and could be extended. In return US will suspend a new rule that broadens restrictions to any company at least 50% owned by companies on the entity list.
China will resume soybean purchases from the US.
A US probe into Chinese shipbuilding has been postponed while US and China discuss the issue further. China suspends its' countermeasures on shipping.
US investigation into China's compliance with the Phase One agreement is also postponed.
Trump set to visit China in April. Xi to vist the US later in 2026.
In addition, Trump mentioned on Air Force One that China will invest more in the US but provided no details.
Things missing from the deal was sales of Nvidia Blackwell chips but Trump said he would give more information later. Taiwan and a TikTok deal also didn't come up. And while they discussed the war in Ukraine, Trump said they did not talk about Chinese oil purchases.

Download The Full US-China trade

Author

Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

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