Key takeaways from Trump’s meeting with Xi Jinping: Tariff on China lowered, rare earth issue ‘settled’, diplomatic message for India

“And that’s for the world, worldwide, you could say this was a worldwide situation, not just a US situation.”

“There is no roadblock at all on rare earth. That will hopefully disappear from our vocabulary for a little while,” said Trump

He also said the US would lower tariffs implemented earlier this year as punishment on China for its sale of chemicals used to make fentanyl from 20 per cent to 10 per cent. That brings the total combined tariff on China down from 57 per cent to 47 per cent.

Trump also called the one-hour-40-minute meeting “amazing” and said that “on a scale of 1 to 10, it was 12”.

Trump calls Xi ‘tough negotiator’

The first takeaway is about the optics of the meeting. Now, the bombast from the US President is nothing new after eight months of Trump 2.0, and there was no account from the Chinese side of the Xi-Trump meeting.

But what was important was that the two leaders played the civil, polite diplomatic game on the world stage, and it showed their complete awareness of the consequences of the meeting.

After both leaders entered the room where they had an official greeting, Trump said, “We’re going to have a very successful meeting, I have no doubt…But he’s a very tough negotiator, that’s not good.”

“We’ll have a great understanding. We’ve always had a great relationship,” Trump said.

Xi was silent except at the beginning when he appeared to say “me too” through a translator after Trump greeted him.

After the meeting, Trump and Xi came out of the building, exchanging what appeared to be pleasantries and a handshake. Trump said something into Xi’s ear before both leaders departed. Xi got into his motorcade, which turned and drove down the tarmac.

Trump being accommodating of the Chinese President was a mark of the US President’s awareness of his limitations while dealing with the world’s second-largest economy. The fact that he cannot handle the Chinese President using his abrasive and bullying tactics, which he employs with many other world leaders, was clearly evident.

Xi praises Trump for peace efforts

Xi, too, played the part, praising Trump for his peace initiatives and marking out two of the several wars that the US President has claimed to have brokered — he singled out the Gaza peace plan and the Thailand-Cambodia truce.

President Donald Trump, right, and Chinese President Xi Jinping, third left, hold their summit talk at Gimhae International Airport in Busan, South Korea, Thursday, Oct. 30, 2025. (AP Photo/Mark Schiefelbein)

The Chinese President was effusive about the US President’s enthusiasm in addressing the “hotspots” around the world. And, he also reminded Trump about China’s role in the Thailand-Cambodia peace as well — a subtle nod to the fact that it was Beijing’s backyard as well.

But the two leaders’ deference to each other showed their restraint and a mark of respect.

Trump buys time for the world

Second was the substance of the meeting.

Trump’s account suggests that China has agreed to keep rare earth exports flowing to the world as part of a one-year agreement.

The rare-earth supply chain that produces magnets is crucial for missiles, aircraft, cars, and refrigerators, and China’s exports haveontol has shaken the world. So much so that NATO officials were complaining that the rare-earth supply disruption would affect the F-35s, and carmaker Ford was talking about halting car production if the issue was not resolved.

So, the world has been watching the Trump-Xi meeting, and the US President has been able to buy time for the world.

In return, he has reduced tariffs on China by 10 per cent, a carrot he had dangled for the Chinese businesses that were complaining and pressuring the Chinese leader to make a deal with the American President.

This give-and-take has merely postponed the problem of rare-earth magnets and has brought home the need to manage resilient supply chains in critical sectors.

The world had come to notice the dependencies on China during the Covid pandemic, and the leverage that Beijing had over the world’s supply chain systems. Now, the US is confronting this challenge and has managed to buy more time for the world to develop its own supply chain and diversify from China.

From that perspective, this is a significant win for the US and the world.

For China, Trump’s acknowledgement of its inclusion in the “G-2” was part of its status recognition. Beijing, under Xi, has been pursuing the goal being the numero uno status in the world’s power hierarchy, and no US President has publicly acknowledged China’s status and the G-2 framing will be perceived as a major win for Beijing.

Stabilising relationship between US and China

Third, the optics and the wider message for the world.

Trump has been able to give China’s Xi a win, but also signalled to the world that he is not moving toward a complete embrace of China’s power status.

In pursuing the limited objective of securing the rare-earth supply chain, he has shown that this is a process of stabilising the relationship between the US and China, not a wider reset.

The fact that Trump had meetings with Southeast Asian leaders and, most importantly, the new Japanese PM Sanae Takaichi — a protege of conservative leader Shinzo Abe and a China hawk — would have given him an insight into what to expect from Xi’s meeting.

That seemed to have worked, as the Chinese decision-making style doesn’t work the way Trump’s working style does. The Chinese system works through bottom-up negotiations, with lower-level officials preparing the ground for the Chinese leader, and there are no last-minute surprises. Trump adapted to this and did not adopt the top-down style he had used in White House.

For India, the message was clear: the US is focused on dealing with China. Trump’s objective about managing China has not changed. What may have changed is whether he needs allies and partners to manage China, and whether he can handle China on his own. That is where the relevance of Quad grouping is in question now.

Also, by reducing tariffs on China to 47 per cent, it has lowered the tariff threshold below the US tariffs on India, which are currently 50 per cent. This puts India at a disadvantage and would propel the negotiations for a trade deal with the US.

Trump has already said he will have a trade deal with India on his way to South Korea. But for the time being, until the trade deal is done, a strategic partner of the US (read India) is put at a disadvantage against the strategic rival of the US (read China). Delhi is watching.