Trump Expects Tariff Reductions in Trade Talks with China

Donald Trump expressed hope of reducing tariffs on Chinese goods. He indicated that this step would be taken due to the fentanyl crisis and mentioned that he would discuss the prominent Blackwell artificial intelligence chip by Nvidia Corp. during a meeting with Xi Jinping.

Trump stated in a press conference on Air Force One, "I expect this to happen because I think they will help us with the fentanyl situation." However, he did not provide details on the magnitude of the tariff reduction.

According to The Wall Street Journal, Trump is considering lowering the 20% tariff on Chinese goods to 10% concerning fentanyl.

Additionally, Trump indicated that he is considering providing China access to Nvidia's Blackwell artificial intelligence processor. This could represent a significant concession within the trade agreement and may raise concerns among national security advocates in Washington.

Trump described the chip as "very special" and stated that it is ahead of current international competitors, saying, "We will talk about the Blackwells." Nvidia CEO Jensen Huang had previously shown a version of the chip to Trump in the Oval Office.

Nvidia reported that the company's value rose by 8.5% on an alternative platform in Asia, indicating potential for further gains with the opening of American markets.

Huang stated that Nvidia has not yet received permission to sell the Blackwell artificial intelligence processor in China, as Beijing has not granted the company permission for market shipment. Huang noted that although the U.S. government indicated earlier this year that it would allow sales of some less advanced AI chips from Nvidia with a 15% cut, those shipments have not yet occurred.

China is eager to lighten the customs burden on goods sent to the U.S.. A halving of fentanyl tariffs, along with Trump halting other threatened tariffs, could lower the average tariff rate on Chinese goods to around 45%.

Last week, U.S. and Chinese officials reached a general framework agreement in Malaysia, setting the stage for Xi and Trump to finalize a trade agreement. This agreement is expected to maintain the current tariffs on Chinese goods.

Trump previously stated that if an agreement could not be reached with Xi, he would raise tariffs on most goods by 100% on November 1. The agreement is also expected to include increased purchases of Chinese agricultural products and a halt on U.S. export controls on free software.

Trump questioned whether the issue of Taiwan would come up during the meeting. While Beijing has expressed a desire to discuss the U.S.'s approach to the island, the U.S. is not willing to change its policies on the matter.

Trump said, "I don’t know if we will talk about Taiwan. Maybe he will want to ask that question. There’s really not much to ask about Taiwan."