Trump's Negotiations with China: Tariff Cuts in Fentanyl Crisis Talks

Trump Considers Tariff Reductions Amid Fentanyl Crisis Talks with China As global leaders convene, President Donald Trump is exploring potential reductions in tariffs imposed on Chinese imports, particularly in the context of addressing the fentanyl crisis. This decision is part of broader discussions with Chinese President Xi Jinping scheduled for Thursday in Busan, South Korea. While aboard Air Force One, Trump expressed optimism about a collaborative approach to curbing fentanyl production, stating, “I expect to be lowering that because I believe they’re going to help us with the fentanyl situation.” The anticipated meeting will occur at 11 a.m. local time, shifting from a previously planned venue nearby where the Asia-Pacific Economic Cooperation (APEC) summit is taking place. Sources indicate that Trump is considering reducing the current 20% tariff on certain Chinese goods to as low as 10%. He emphasized that China would engage in actions to help mitigate the export of precursor chemicals used to manufacture fentanyl, although he did not elaborate on specific details regarding tariff reductions. Additionally, Trump hinted at the possibility of allowing China to access Nvidia’s new Blackwell AI chip, a move that could spark national security concerns among US policymakers. Trump described the chip, presented to him by Nvidia CEO Jensen Huang, as “super duper” and significantly advanced compared to competitors. Nvidia has seen a positive market response following Trump's comments, with shares rising by 8.5% during Asian trading, suggesting investor confidence may continue to grow ahead of the US market's opening. Trump's remarks also projected expectations for a mutually beneficial trade deal during the APEC summit. He claimed, “The world is watching, and I think we’ll have something that’s very exciting for everybody,” further stoking hopes for a deal that might ease existing trade barriers between the United States and China. Jensen Huang remarked that Nvidia has not pursued the sale of the Blackwell ASIC chip to China due to Beijing's restrictions, stating, “They’ve made it very clear that they don’t want Nvidia to be there right now.” Despite obtaining US licenses for less advanced products, Nvidia’s share in the Chinese market has plummeted to zero. The proposed reduction in tariffs could help alleviate some pressure on Chinese exports, dropping the average tariff rates closer to 45%. In a week where US and Chinese officials reached a preliminary agreement in Malaysia to reset negotiations, both countries are under pressure to finalize terms that could lead to the rollback of recent tariffs. Amid these negotiations, China appears ready to collaborate, with Foreign Ministry spokesperson Guo Jiakun stating that China is prepared to offer a “fresh momentum” in the relationship, encouraging the US to “take concrete actions” to facilitate cooperation on critical issues like fentanyl. As trade discussions progress, there are indications of potential progress on other issues, including the future of TikTok and the resumption of soybean purchases from the US. With the backdrop of these conversations, Trump has downplayed expectations for significant discussions on Taiwan, stating, “I don’t know that we’ll even speak about Taiwan.”