Experts See Red Flags in Trump’s Latest Deal with Xi Jinping

Trump Cuts Tariffs on China in Exchange for Fentanyl Crackdown

Washington, D.C. — In a landmark agreement on Thursday, former President Donald Trump made a major concession to Chinese President Xi Jinping: in exchange for China’s commitment to curb the flow of fentanyl and its precursor chemicals, the United States will reduce tariffs on Chinese imports by 10%.

The move marks a significant shift in the long-running U.S.–China trade standoff. While the tariff cut is modest, it lowers the minimum rate on Chinese imports to 20%, with the average tariff rate dropping to about 47%—still high, but closer to global norms.

The agreement could bring some relief to U.S. consumers and businesses by easing prices on imported goods. It also restores a measure of normalcy to Chinese trade relations after years of punitive tariffs that had isolated Chinese products in the American market.

However, the decision represents a calculated risk for the Trump administration. Throughout the trade war, China has often outmaneuvered the U.S. in negotiations, and critics warn that this latest concession may once again benefit Beijing more than Washington.

A History of Uneven Trade Battles

Trump’s trade strategy has aimed to achieve four key goals:

1. Curb fentanyl imports into the U.S.

2. Revive domestic manufacturing.

3. Balance trade with China.

4. Secure the sale of TikTok’s U.S. assets.

To some extent, these efforts have shown progress. China has taken steps to control precursor chemicals used in fentanyl production, several multinational firms have pledged new manufacturing investments in the U.S., and the U.S.–China trade deficit recently reached a 21-year low. Additionally, the two leaders agreed on a framework for a potential TikTok deal.

Yet the broader relationship remains strained. China has restricted exports of rare-earth minerals—critical for electronics and defense—refused to buy U.S. soybeans, and launched antitrust probes into American firms. These measures, combined with retaliatory tariffs on U.S. goods, have hurt American farmers and manufacturers.

Although Beijing has pledged multiple times to ease restrictions on rare earth exports, those promises have largely gone unfulfilled. The latest agreement reportedly includes a partial rollback of recent curbs, but China’s broader export limits still remain.

TikTok’s U.S. future also remains uncertain. While Beijing has promised to “properly address” the issue, it has not confirmed a final deal despite Thursday’s meeting between Trump and Xi.

Why Trump Agreed to the Deal Now

Trump’s renewed willingness to negotiate with China may reflect real, measurable progress on the fentanyl front. Earlier this year, China added more chemicals used in fentanyl production to its controlled substances list and intensified crackdowns on black-market sales.

Trump acknowledged China’s “very strong action” during his announcement Thursday, noting improvements in the fight against synthetic opioids. According to the U.S. Drug Enforcement Administration, fentanyl purity declined through 2024, suggesting that Mexican drug producers have faced difficulties obtaining Chinese precursors. U.S. Customs and Border Protection has also reported a decline in fentanyl seizures at the border.

Still, Trump’s stance marks a sharp reversal from his tone in late 2024, when he accused Beijing of breaking its promises and announced plans to raise tariffs over fentanyl concerns.

“China is going to be working with me,” Trump said this week. “I believe they’re going to help us with the fentanyl situation.”

China’s Leverage and U.S. Political Calculations

China continues to wield significant leverage over the U.S. economy. Trump’s tariffs have angered farmers—a key constituency—and contributed to shortages of essential minerals. Meanwhile, Beijing has resisted opening its markets to U.S. technology, including artificial intelligence chips, a central Trump objective.

Tariffs remain one of Trump’s few remaining tools to influence China. Lowering them—especially in response to Beijing’s cooperation on fentanyl—could signal a tactical move to secure short-term political and economic gains.

China, for its part, announced that it would make “corresponding adjustments” to its countermeasures on U.S. imports related to fentanyl following Trump’s tariff reduction.

Potential Fallout for U.S. Allies

While the deal may ease tensions with China, it risks straining ties with Mexico and Canada, both of which have also taken steps to combat fentanyl trafficking. Trump has previously threatened to increase tariffs on those countries even as he lowers them for China—a move likely to frustrate America’s closest trade partners.

Despite these geopolitical complications, the tariff cut may help U.S. consumers, who have faced higher prices on imported goods since the trade war began. Even a modest reduction could help ease inflationary pressure over time.

Bottom Line

Trump’s new deal with Xi Jinping marks another chapter in the complex and unpredictable U.S.–China relationship. While it offers potential economic relief and progress on fentanyl control, it also underscores the delicate balance between diplomacy, trade, and political strategy.

Whether this agreement marks a turning point—or another fleeting truce in a years-long rivalry—remains to be seen.