Trump likely to discuss fentanyl tariffs, Nvidia's Blackwell chips with Xi

Trump's proposed meeting with Xi will take place on the sidelines of the Apec summit, making it the first between the two leaders since the US President returned to office in January this year

US President Donald Trump on Tuesday (local time) said that fentanyl tariffs on China and Nvidia's advanced artificial intelligence chips will be some of the issues that he plans to discuss with his Chinese counterpart Xi Jinping in South Korea.

 

Speaking to reporters aboard Air Force One, Trump said that fentanyl flows into the US and "farmers" will be among the topics he discusses with Xi, CNBC reported.

 

When asked whether a potential one-year delay in Beijing’s rare earth export controls would be enough to prompt additional concessions from the US, Trump said, “We haven’t talked about the timing yet, but we are gonna work out something."

 

 

US-China ties

 

Trump's comment on fentanyl came after the Wall Street Journal on Tuesday reported that Washington could consider bringing down China's fentanyl related tariffs on Chinese exports to half from the present 20 per cent, in return for Beijing's crackdown on the export of chemicals that make fentanyl.

 

The report suggests that if Washington were to lower China's fentanyl-related tariffs to 10 per cent, the average tariff on most Chinese imports, now about 55 per cent, would fall to roughly 45 per cent.

 

Trump's proposed meeting with Xi will take place on the sidelines of the Asia-Pacific Economic Cooperation (Apec) summit, making it the first between the two leaders since the former returned to the Oval Office in January this year.

 

The meeting comes at a time when the world's two most powerful economies are seeing escalated tensions. Ahead of the November 10 deadline, when the lower tariffs on each other's goods are set to expire, Beijing announced plans to impose export curbs on most of its products, including rare earth minerals. The move prompted Trump to respond with an additional 100 per cent tariffs on Chinese goods. 

 

Trump to discuss Nvidia's Blackwell chips with Xi

 

Ahead of his high-stakes meeting with Xi, Trump told reporters that Nvidia's Blackwell AI processors could be discussed. He added, "We’ll be speaking about Blackwell, it’s the super duper chip."

 

Nvidia's Blackwell architecture represents its latest generation of AI chips or graphics processing units (GPUs) that are used to train and run large language models.

 

Trump lauded Nvidia's Blackwell chips, adding they are ahead of any other chip by at least a decade. He said, "That’s our country. We’re about 10 years ahead of anybody else in chips, in the highly sophisticated chips. I think we may be talking about that with President Xi."

 

The US President's comment on Nvidia chips came at a time when the company is facing an uncertain future in China. While the US export controls have long prevented Nvidia from selling its most advanced artificial intelligence products to China, in July, Washington rolled back its restrictions on H20 chips, allowing the chipmaker to sell this less-advanced product to China.

 

Trump-Xi meeting

 

While the members of the Trump administration have expressed optimism regarding a meeting between the two powerful leaders, the Chinese foreign ministry, in a statement on October 24, only mentioned Xi's visit to South Korea and excluded any details on his meeting with Trump.

 

Recently, Trump also described the relationship with China as "very good", adding that they are going to have a great meeting with their Chinese counterpart.

 

Likely outcomes of the Trump-Xi meeting

 

According to the report, the likely outcomes from the meeting of the two leaders could include Beijing agreeing to guarantee US access to rare earth materials despite its export controls, purchasing Boeing aircraft, approving the sale of TikTok’s US operations, and stepping up efforts to curb fentanyl trafficking.

 

In exchange, the US could ease export restrictions on some semiconductor equipment and AI chips, withdraw its 100 per cent tariff threat, and cut fentanyl-related tariffs by 10 percentage points starting November 10, as part of a renewed tariff truce, Neo Wang, China strategist at Evercore ISI, said.