President Donald Trump spent the week in Asia on a foreign policy trip meant to boost economic and trade ties with several Asian countries. Trump kicked off the tour in Japan, and soon moved onto South Korea, before visiting China today.
One of Trump’s principal goals on the trip was to curtail some negative trade developments that unfolded in recent months as a result of Trump-pushed tariffs and other trade policy. On some fronts, Trump appeared to make meaningful progress, but on others, much work remains to return trade relations to a healthy place.
Trump’s Visit to Japan: Key Highlights
President Trump visited Japan earlier this week with little expectations for a huge trade breakthrough, following trade talks and a subsequent agreement earlier this year.
Trump met new Japanese Prime Minister Sanae Takaichi earlier this week and emphasized strong ties between the U.S. and Japan. Although progress was made on military ties, little agreement was reached on tariffs and trade.
There was a broad and high-level agreement between the two countries to strength the rare-Earth metal supply chain. That was a positive step ahead of Trump’s meetings with South Korea and China later in the week.
Additionally, the Japanese Prime Minister discussed ways for the country to meet its agreement to invest over $550 billion into the U.S. and its infrastructure and economy, following an earlier trade deal with the U.S. this summer.
Trump’s Visit to South Korea: Key Highlights
President Trump made his way to South Korea after the earlier visit to Japan. After seeking a deal to re-invigorate trade relations between the U.S. and South Korea, Trump announced a Korean investment of $350 billion into the U.S. – in a deal similar to the one between the U.S. and Japan. In return, the U.S. agrees to work to reduce tariffs on South Korean goods.
Trump emphasized American oil and gas as U.S. exports to South Korea that will grow, as well as increased military investments. Some of South Korea’s investment dollars will go into U.S. shipbuilding, while other areas will consist of cash payments into U.S. firms that makes sense to U.S.-South Korea priorities. This is essentially a “fee” to avoid higher tariffs.
U.S. tariffs on South Korea will decrease to 15 percent, which will apply to goods currently facing higher tariffs such as automobiles (currently at 25 percent.) Pharmaceuticals are also an area likely to see tariff relief.
Trump’s Visit to China: Key Highlights
President Trump met with Chinese leader Xi Jinping in South Korea today, as the last leg of his Asia trip took place. The location of Busan, one of South Korea’s key ports, was noteworthy: it is central to shipping in the region. Obviously, the main goal of the U.S.-China meeting was to make progress on a long-elusive trade deal to hopefully roll back tariffs and provide a boon to two of the world’s largest economies.
The immediate result of today’s meeting was a one-year truce in the trade war, which will see many tariffs paused or rolled back, and a cessation of retaliatory measures against both countries by each other.
China also agreed to roll back stiff export controls on rare-Earth metals: another key U.S. priority that Trump is calling a major win. Trump plans a visit to China next year.
What Comes Next
As with the entirety of the trade war between Trump and many countries this year, all developments are subject to change. The deal between the U.S. and China is most likely to see some changes as the next few months progress. However, anytime that the U.S. and its trade partners are meeting in-person is a better alternative than endless escalation in trade relations.
