Trump Set to Talk Fentanyl Tariffs and Nvidia’s Blackwell Chips with Xi
On Tuesday, US President Donald Trump stated that he intends to address fentanyl tariffs on China and Nvidia’s advanced artificial intelligence chips in discussions with his Chinese counterpart Xi Jinping during their meeting in South Korea. While addressing reporters on Air Force One, Trump remarked that fentanyl enters the US and that “farmers” will be one of the subjects he plans to discuss with Xi. In response to a question regarding the possibility of a one-year delay in Beijing’s rare earth export controls influencing further concessions from the US, Trump stated, “We haven’t talked about the timing yet, but we are gonna work out something.” Trump’s remark regarding fentanyl followed a report on Tuesday, which indicated that Washington might contemplate reducing China’s fentanyl-related tariffs on Chinese exports from the current 20 percent to half, in exchange for Beijing’s efforts to curb the export of chemicals used in fentanyl production. The report indicates that should Washington reduce China’s fentanyl-related tariffs to 10 per cent, the average tariff on the majority of Chinese imports, currently around 55 per cent, would decrease to approximately 45 per cent.
Trump’s proposed meeting with Xi is set to occur on the sidelines of the Asia-Pacific Economic Cooperation summit, marking the first encounter between the two leaders since the former’s return to the Oval Office in January this year. The meeting occurs amid heightened tensions between the world’s two most powerful economies. 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 action led Trump to announce an increase of 100 per cent tariffs on Chinese goods. Ahead of his pivotal meeting with Xi, Trump informed that Nvidia’s Blackwell AI processors might be on the agenda. He stated, “We’ll be speaking about Blackwell, it’s the super duper chip.”
Nvidia’s Blackwell architecture signifies its newest generation of AI chips or graphics processing units utilized for training and operating large language models. Trump praised Nvidia’s Blackwell chips, stating they are ahead of any other chip by at least a decade. He stated, “That’s our country.” We are approximately a decade ahead of all competitors in the realm of advanced chips, particularly in the highly sophisticated segment. “I believe we might be discussing that with President Xi.” The US President’s remark regarding Nvidia chips emerged during a period of uncertainty for the company in China. Despite longstanding US export controls that have barred Nvidia from selling its most advanced artificial intelligence products to China, in July, Washington eased its restrictions on H20 chips, permitting the chipmaker to market this less-advanced product to China.
Members of the Trump administration have conveyed a sense of optimism about a potential meeting between the two influential leaders. However, in a statement released on October 24, the Chinese foreign ministry only referenced Xi’s visit to South Korea, omitting any specifics regarding his meeting with Trump. Recently, Trump characterized the relationship with China as “very good,” further stating that they are set to have a great meeting with their Chinese counterpart. 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 said.
