Trump said he would go to China in April for a state meeting with Xi in Beijing, suggesting a more fulsome agreement could be signed at that time. But in the meantime, China would resume buying American soybeans, while the US would lower its fentanyl-related tariffs on Chinese goods from 20 per cent to 10 per cent.
“Any deal is more tactical truce than game-changer,” Han Lin, the Shanghai-based managing director of consulting firm The Asia Group, says. “So while we can expect transactional headline-making wins – soybean sales, fentanyl tariff cuts – the rivalry’s structural fault lines remain intact.
“Unsurprisingly, both leaders are playing to their bases, not building lasting peace.”
For days leading up to the meeting, Trump and his advisers were bullish on the prospects of a deal, with the US president at one point declaring his confidence he and Xi would conclude a “deal on everything”. Many will breathe a sigh of relief, especially in Taipei, that Trump’s “everything” did not include Taiwan.
“Taiwan never came up,” Trump reported, but claimed that he and Xi agreed to work together on Ukraine, though he gave little detail on this.
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The meeting began with Trump and Xi sitting down opposite each other for the first since 2019 at a long table flanked by their senior advisers, with Xi maintaining his famous inscrutability, his poker face rarely betraying any emotion.
The Chinese leader’s first comments were in line with Beijing’s long-running efforts to frame China’s rise as not posing a challenge to US supremacy. In his short speech before the press was asked to leave the room, Xi appealed to Trump’s MAGA instincts and said China’s development went “hand in hand with your vision to make America great again”.
Likening the US-China relationship to a “giant ship”, Xi urged Trump to “stay the right course” and ensure steady sailing in the face of “wind, waves and challenges”.
The sailing metaphor is an understatement for the sheer chaos wrought on the world by this trade feud, which kicked off in April after China was the only country to retaliate to Trump’s so-called “Liberation Day” tariffs.
A fragile truce brokered in May to wind back triple-digit tariffs on each other’s exports, which had in effect ended two-way trade and upended global supply chains, has almost collapsed on multiple occasions.
The Chinese and US delegations sit down to begin talks in Busan.Credit: Getty Images
And Thursday’s meeting had been preceded by weeks of tit-for-tat escalation, with Trump threatening to hit Chinese goods with a further 100 per cent tariff after Beijing announced sweeping new rare earth controls.
For all of this global chest-beating, however, many analysts have reached the conclusion that Beijing’s rare earths card has given Xi an unassailable winning hand in this trade war. By controlling 90 per cent of the world’s processing of the rare earths, Beijing can stifle the manufacturing needed for high-tech products, most significantly weapons systems.
And Trump’s economic cudgel of choice, tariffs, is now largely redundant. Even he effectively acknowledged this when he conceded earlier this month that his threatened 100 per cent extra levy on China was “not sustainable”.
Where to from here is uncertain, but Trump’s overall China strategy remains as incoherent as ever.
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