United States President Donald Trump on Thursday said that following an “amazing” meeting with Chinese President Xi Jinping, he has agreed to reduce tariffs on China in exchange for Beijing keeping rare earth exports flowing and cracking down on the illicit fentanyl trade, The Guardian reported.

Speaking to reporters aboard Air Force One after the talks in South Korea’s Busan, Trump said China would lift restrictions on rare earth exports as part of a one-year deal expected to be renewed annually.

Following this, only Brazil and India remain subject to higher tariffs among major US trading partners.

“All of the rare earth has been settled,” Trump was quoted as saying. “That’s for the world, worldwide. You could say this was a worldwide situation, not just a US situation. There is no roadblock at all on rare earth. That will hopefully disappear from our vocabulary for a little while.”

The US president added that the agreement would help maintain global supply and ease concerns about shortages affecting industries such as electronics and defence technology.

Rare earth minerals are essential for the production of smartphones, electric vehicles and defence systems, and have been central to recent trade tensions between the two countries.

After the meeting, China announced a one-year pause on export controls introduced on October 9, when it had expanded its rare earth export rules to cover additional materials and regulations, Reuters reported.

However, restrictions imposed in April on seven rare earth elements and on rare earth magnets are expected to remain.

China had imposed the restrictions in April in response to Trump’s decision to levy steep tariffs on several trading partners, including Beijing.

On Thursday, Trump also announced a reduction in the fentanyl-linked levy on Chinese goods to 10% from 20%, which would bring overall US tariffs on Chinese imports to 47% from 57%.

Fentanyl is a synthetic opioid blamed for widespread addiction in the US. The Donald Trump administration has launched a crackdown on its illegal imports, linking the matter to tariff adjustments with some countries.

Since May, the US and China have maintained a tentative trade understanding, agreeing to roll back some of the higher tariffs on each other’s goods.

The trade war reignited this month after Beijing proposed to expand its curbs on exports of rare earth minerals.

In response, Trump had threatened to impose additional 100% tariffs on Chinese exports and introduce new restrictions on products made with US software.

Trump had hinted this week that he would consider reducing tariffs if Beijing committed to stem the flow of ingredients used to make fentanyl.

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