Gyeongju, South Korea – United States President Donald Trump and Chinese President Xi Jinping have agreed to call off a mutual escalation in their countries’ trade war, lowering the temperature in a heated confrontation that has threatened to upend the global economy.

Trump and Xi sealed a one-year trade truce on Thursday on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in South Korea, where the two leaders met face-to-face for the first time since 2019.

But while Trump and Xi’s agreement offered a reprieve to businesses unsettled by months of back-and-forth trade salvoes, it did little to roll back existing trade barriers and left numerous points of contention between the sides unresolved.

“The apparent results of this meeting will be a pause and a small roll back in the trade war,” Dennis Wilder, a professor at Georgetown University who worked on China at the CIA and the White House’s National Security Council, told Al Jazeera.

“Both sides have not given up their trade weapons but merely have agreed to stop firing as long as both sides hold to the agreements,” Wilder said.

Under the deal, China agreed to defer its planned export controls on rare earths, while the US will drop a threatened 100 percent tariff on Chinese goods.

Trump said he would also lower a 20 percent fentanyl-related tariff to 10 percent after Xi agreed to “work very hard” to stem flows of the synthetic opiate.

“I believe he is going to work very hard to stop the death that is coming in,” Trump said on Air Force One after departing South Korea.

Trump, who hailed his 90-minute meeting with Xi as “amazing”, said the issue of rare earths had been “settled” under the agreement, which he said would be renegotiated every year.

“There’s no roadblock at all on rare earths – that will hopefully disappear from our vocabulary for a little while,” Trump said.

Trump, whose meeting with Xi capped a whirlwind tour of Asia that included stops in Malaysia and Japan, said China had also agreed to purchase “tremendous amounts” of American soya beans.

After Trump’s comments, Xi said the sides had reached a “consensus to address problems” in the talks, but did not directly reference specific details of the agreement.

Washington and Beijing should “promptly refine and finalise follow-up actions” to implement the consensus and “offer tangible results to reassure both countries and the global economy,” Xi said, according to a readout by the state-run Xinhua News Agency.

China’s Ministry of Commerce later confirmed aspects of the agreement, including the one-year deferral of its export controls.

The ministry also said Trump had agreed to suspend plans to extend Washington’s blacklist of firms prohibited from doing business with US companies and individuals to subsidiaries, and that both sides would pause tit-for-tat port fees.

Asian stock markets were largely unmoved, with benchmark indexes in Hong Kong, Shanghai and Sydney closing lower and Japan’s main index finishing flat.

China’s plans to require companies anywhere in the world to obtain a licence to export goods containing even trace amounts of its rare earths had raised fears of massive disruption to global supply chains.

Chinese producers hold a near monopoly on the supply of the critical minerals, which are used to make everything from smartphones to fighter jets.

Shan Guo, a partner with Shanghai-based consultancy Hutong Research, said the cut in the fentanyl tariff was “largely expected”.

“China has been asking for the fentanyl cut since Stockholm, it is now getting what it wants using rare earth as leverage,” Guo told Al Jazeera, referring to US-China trade negotiations that took place in the Swedish capital in July.

“It is a 10 percent cut instead of 20, likely because US still wants to maintain some leverage as the two sides talk more going forward. Regardless, this lowered tariff on China will reduce the competitive disadvantage of Chinese goods vs ASEAN peers,” Guo said, referring to the bloc of 11 Southeast Asian economies, many of which, like China, rely heavily on exports.

Expectations for a deal had been modest ahead of the summit, and Thursday’s agreement left most tariffs and export controls hindering trade between the sides in place.

Trump’s pledge to halve his fentanyl tariff would leave the average US duty on Chinese goods at around 47 percent, and China’s average tariff on US products at about 32 percent.

Washington continues to include more than 1,000 Chinese firms on its export control list, while Beijing has dozens of US companies on its comparable “unreliable entity list”.

Deborah Elms, head of trade policy at the Hinrich Foundation in Singapore, said the agreement could be seen as a “partial freeze” or “minor rollback” in the US-China trade war.

Cameron Johnson, a partner at Shanghai-based consultancy Tidalwave Solutions, said US-China ties should not deteriorate in the near term, describing the agreement as “probably the best both sides could have done given the circumstances”.

But Johnson noted Trump’s comments that the agreement would be subject to annual review.

“It allows both sides to calibrate the relationship, and also buying power, of each side every year now going forward,” he told Al Jazeera.