U.S. President Donald Trump and Chinese President Xi Jinping have reached a preliminary agreement aimed at easing trade tensions between the world’s two largest economies.

Following a one-hour and forty-minute meeting in the South Korean port city of Busan, both leaders announced that the United States would reduce tariffs on Chinese goods from 57% to 47%. In return, Beijing has pledged to maintain the steady export of rare earth materials, purchase U.S. soybeans, and intensify efforts to curb fentanyl trafficking.

According to China’s state news agency Xinhua, President Xi emphasized that Beijing and Washington should avoid falling into a “vicious cycle of retaliation,” urging both sides to act in the long-term interest of cooperation.

“China and the U.S. should refine and finalize follow-up work as soon as possible, maintain and implement the consensus, and provide tangible results to set minds at ease about the economies of China, the United States, and the world,” Xi said, as reported by Xinhua.

The Busan meeting marks a significant step toward stabilizing the fragile trade relationship between the two powers, whose tariff disputes have disrupted global supply chains and increased market uncertainty.

While specific implementation details have yet to be finalized, both sides expressed optimism that the new understanding could pave the way for more comprehensive negotiations and renewed economic cooperation.