U.S. President Donald Trump meets with China's President Xi Jinping at the start of their bilateral meeting at the G20 leaders summit in Osaka, Japan, June 29, 2019. / REUTERS/Kevin Lamarque

U.S. President Donald Trump said on Oct. 30 he had agreed with President Xi Jinping to trim tariffs on China in exchange for Beijing cracking down on the illicit fentanyl trade, resuming U.S. soybean purchases and keeping rare earths exports flowing.

Trump's face-to-face talks with Xi in the South Korean city of Busan, their first since 2019, marked the finale of the U.S. president's whirlwind Asia trip on which he also touted trade breakthroughs with South Korea, Japan and Southeast Asian nations.

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"I thought it was an amazing meeting," Trump told reporters aboard Air Force One shortly after he departed Busan, ranking the talks a "12 out of 10".

Trump said tariffs imposed on Chinese imports would be cut to 47 percent from 57 percent by halving the rate of tariffs related to trade in fentanyl precursor drugs to 10 percent from 20 percent.

Xi will work "very hard to stop the flow" of fentanyl, a deadly synthetic opioid that is the leading cause of American overdose deaths, Trump said. The tariff was reduced "because I believe they are really taking strong action," he added.

Trading in global stocks was choppy as Trump revealed details of the deal, with major Asian indexes and European futures swinging between gains and losses. China's Shanghai Composite Index slipped from a 10-year high, while U.S. soybean futures were weaker.

"At the moment, the price action makes things seem like a lot of this was already priced in," said Kyle Rodda, senior market analyst at Capital.com in Melbourne. "Arguably the markets were hoping for the complete removal of the fentanyl tariff, so that could explain the ambivalence in the markets."

Only India and Brazil are still subject to higher tariff rates among major U.S. trading partners.

World stock markets from Wall Street to Tokyo had hit record highs leading up to the meeting on hopes of a breakthrough in a trade war between the world's two largest economies that has upended supply chains and rocked global business confidence.

The cordial meeting, which took place on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit, lasted nearly two hours.

Trump repeatedly talked up the prospect of reaching agreement with Xi since U.S. negotiators on Oct. 26 said they had agreed a framework with China that will avoid 100 percent U.S. tariffs on Chinese goods and achieve a deferral of China's export curbs on rare earths, a sector it dominates.

But with both countries increasingly willing to play hardball over areas of economic and geopolitical competition, many questions remain about how long any trade detente may last.

Frictions now and then are normal

As they sat down to begin talks at a South Korean air base on Oct. 30 morning, Xi told Trump via a translator it was normal for the superpowers to have frictions now and then.

A few days ago, trade negotiators for both countries reached a "fundamental consensus on addressing each other's primary concerns", Xi said. "I am willing to continue working with President Trump to lay a solid foundation for China-U.S. relations," he added.

As well as trimming the fentanyl tariffs, Beijing had sought an easing of export controls on sensitive U.S. technology, and a rollback of new U.S. port fees on Chinese vessels aimed at combating China's global dominance in shipbuilding, ocean freight and logistics.

Trump made no immediate comment on U.S. concessions but said China would purchase "tremendous amounts" of U.S. soybeans and other farm products "starting immediately".

Ahead of the summit, China bought its first cargoes of U.S. soybeans in several months, Reuters reported exclusively on Oct. 29.

Previous trade deals, which brought down retaliatory tariffs on the U.S. side and restarted the flow of rare earth magnets from China, are due to expire on Nov. 10.

But Beijing dramatically expanded its controls on rare earths earlier this month, minerals used in everything from cars to fighter jets on which they have a global stranglehold.

"They're not going to impose the rare earth controls," Trump told reporters.

Trump signed various pacts with Japan and Southeast Asian nations on diversifying supplies of rare earths during his trip, though blunting China's dominance in that area may take years.

The leaders did not discuss chipmaker Nvidia's state-of-art Blackwell artificial intelligence chip, Trump said, walking back the previous day's remarks about potentially helping the company to export a scaled-down version of its current flagship GPU processor, a key component in the AI race.