US President Donald Trump speaks during a bill signing ceremony on July 16. Trump signed legislation that strengthens criminal penalties for fentanyl.
(Bloomberg) — Donald Trump said he expects to lower tariffs the US has imposed on Chinese goods over the fentanyl crisis and speak with China’s Xi Jinping about Nvidia Corp.’s flagship Blackwell artificial intelligence chip, as leaders of the world’s biggest economies seek to ease tensions in a meeting on Thursday.
“I expect to be lowering that because I believe they’re going to help us with the fentanyl situation,” Trump told reporters on Air Force One as he headed to South Korea on Wednesday, a day before he’s slated to meet with China’s president.
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Trump said he expected Beijing would be “doing things” and work with him directly to address the export of precursor chemicals critical to manufacturing fentanyl. He didn’t provide further details on the magnitude of the tariff reduction.
The Wall Street Journal reported Tuesday Trump was considering cutting the 20% tariff to 10% on Chinese goods over fentanyl.
Trump also suggested he was open to providing China with access to Nvidia’s Blackwell AI processor as part of a trade deal, which would represent a major concession and rile up national security hawks in Washington.
“We’ll be speaking about Blackwells,” Trump said, touting the chip as “super duper” and years ahead of what was currently available from other countries. He said Nvidia CEO Jensen Huang had recently brought a version of the chip to the Oval Office for him to see.
AI bellwether Nvidia’s shares extended gains to 8.5% in Asian trading on the alternative platform Blue Ocean after Trump’s remarks, signaling potential further gains when US markets open.
Huang said at an event in Washington earlier Tuesday that the chipmaker hasn’t yet sought US permission to sell its Blackwell AI processor in China because authorities in Beijing have barred the company from shipping to the Chinese market.
Huang said that Nvidia has excluded China from its forecast and that its market share in the world’s second-largest economy has dropped to zero, even after President Donald Trump relaxed export controls on some of its less-advanced AI chips in exchange for giving the US government a 15% cut of the sales.
“The president has licensed us to ship to China, but China has blocked us from being able to ship to China,” Huang told reporters at a company event in Washington. “They’ve made it very clear that they don’t want Nvidia to be there right now.” Earlier this year, the US government said it would approve licenses for Nvidia’s H20 chip, which was specifically designed to comply with US export controls, though those shipments have not yet occurred.
China is eager to reduce the tariff burden on goods it sends to the US. Halving fentanyl tariffs would reduce the average tariff on most Chinese imports to around 45% — assuming Trump also holds off on other threatened tariffs — and would make Chinese goods more competitive with other US trading partners that have benefited in recent months from lower tariff rates.
Chinese and US officials reached a broad framework agreement over the weekend in Malaysia, setting the table for Xi and Trump to finalize a trade deal that would roll back many of the tariffs, fees, and export restrictions threatened or implemented in recent weeks.
The agreement is expected to otherwise keep tariff rates on Chinese goods steady, with Beijing delaying for at least a year announced restrictions on its rare earths exports. Trump had earlier plans to hike the levies on most goods by 100% on Nov. 1 if he failed to strike a deal with Xi.
China is also expected to make a substantial soybean purchase, while the US will hold off on threatened export controls on software that would restrict Chinese access to a broad swath of technology. The pair are also expected to agree to reduce shipping fees and approve the sale of the US operations of ByteDance Ltd.’s social video app TikTok to a consortium organized by the Trump administration.
Trump did downplay the notion that he and Xi would discuss the fate of Taiwan, even as Beijing has signaled an interest in discussing the US position toward the island and US officials have said the pair plan to discuss an overarching global security effort. Still, the US has indicated it is unwilling to change its policy toward Taiwan.
“I don’t know that we’ll even speak about Taiwan,” Trump said. “I’m not sure — he may want to ask about it. There’s not that much to ask about Taiwan.”
–With assistance from Lianting Tu and Michael Shepard.
(Adds Huang comments in paragraphs 8-10. A previous version of this story corrected the spelling of Nvidia in sixth paragraph.)
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