US-China Trade Deal: Fentanyl Tariffs Reduced After Trump-Xi Meeting

In a surprising development in the US-China trade deal, President Donald Trump has announced a reduction in China’s fentanyl tariffs. After his first face-to-face meeting with Chinese President Xi Jinping in six years, Trump has decided to cut the rate from 20% to 10%. This breakthrough signals a potential trade deal, with China agreeing to discuss chip restrictions with Nvidia and remove obstacles to rare earths.

US-China Trade Deal Takes a Positive Turn

Amid growing speculations and anticipations, Donald Trump met Xi Jinping at an airbase in the coastal city of Busan, marking their first direct interaction in six years. Following the meeting, the former announced his decision to reduce the 20% tariffs on Chinese goods related to fentanyl to 10%, bringing the total duties imposed on Chinese imports down from 57% to 47%.

Reportedly, the two global powers have reached an agreement, with China pledging to curb fentanyl production in exchange for reduced tariffs on Chinese goods. In an X post , The Kobeissi Letter revealed this breaking news, sharing insights on the "amazing" meeting between the two leaders.

"I thought it was an amazing meeting,” noted the American Captain, giving the talks a score of "12 out of 10". He posited that the Chinese import tax would be slashed to 47% from 57%, with a significant reduction in tariffs related to fentanyl precursor drugs from 20% to 10%. He added that Xi would work “very hard to stop the flow" of fentanyl, which is a deadly synthetic opioid, stating, “I believe they are really taking strong action.”

In response to this significant development in the US-China trade deal, Kyle Rodda, senior market analyst at Capital.com in Melbourne, noted,

"At the moment, the price action makes things seem like a lot of this was already priced in. Arguably the markets were hoping for the complete removal of the fentanyl tariff, so that could explain the ambivalence in the markets."

US and China to Strengthen Relationship

In a related development, Donald Trump noted that Jinping would visit America, while he plans to reciprocate with a trip to China in April 2026. This indicates that after the meeting, the leaders have planned to strengthen their relationship, further easing the geopolitical tensions.

The countries have also reached a one-year agreement that prevents dramatic restrictions on rare earth minerals, a crucial component in producing computer chips, smartphones, AI systems, and defense technology.

How Will This Move Impact the Crypto Market?

The recent US-China trade deal has sparked optimism in the crypto market, with experts and analysts predicting a potential rebound. As the industry saw its largest fall on October 11 following Donald’s 100% tariff imposition on China, the recent move is poised to have a positive impact. If a tightened policy could lead to a crash, a loosened deal could indeed result in a rally.