Trump Strikes A Trade Truce With Xi, But Superpower Competition Is Here To Stay

Summary

US President Donald Trump and Chinese leader Xi Jinping agreed to ease trade tensions during talks in South Korea, including tariff reductions and lifting rare-earth mineral restrictions for a year.
Key issues like Taiwan, human rights, and defense were not addressed, leaving structural tensions in US-China relations unresolved.
China's rare-earth export controls have spurred Western nations to seek alternative supply chains, with discussions ongoing at the G7 and EU-China meetings.

US President Donald Trump has struck a truce in the trade war with China, telling reporters after his high-stakes meeting with Chinese leader Xi Jinping in South Korea that he expects to sign a bilateral deal with Beijing “pretty soon.”

But even if Beijing and Washington are able to build on their progress in Busan and strike a deal, the US-China relationship looks set to remain tense due to the underlying frictions across defense, human rights, technology, and economic issues that are still shaping their ties.

Instead, the October 30 agreement to ease trade tensions is the first step of a wider push by both China and the United States to buy time as they look to enshrine rules on how to manage their superpower rivalry and dig in for a longer term competition.

“It's good for the two most significant global players to be working to stabilize their relationship," Zsuzsa Anna Ferenczy, a visiting fellow at the Martens Center, a Brussels-based think tank, told RFE/RL. “But the structural issues are all still there. This doesn’t fix the big problems.”

While the agreement on trade issues opens the door for continued high-level diplomacy -- including a Trump visit to China in April and Xi potentially traveling to the United States next year -- the key flashpoints at the center of US-China tensions were largely left untouched.

Taiwan, the self-governing island of 23 million that Beijing claims as its own territory and has threatened to annex by force, if necessary, was not discussed during the South Korea meeting, according to Trump. He also said that China’s purchasing of Russian oil, which Moscow has used to help fund its war, was not raised.

Trump said that he and Xi discussed the need to “work together” to help end the more than three-year war in Ukraine, although he did not mention any specifics.

“It seems like both sides probably didn’t want to bring elements into these talks that could derail this focus on trade,” said Ferenczy, who is also an assistant professor at National Dong Hwa University in Taiwan.

Will Trump And Xi Agree To A Broader Deal?

Trump said after his meeting with Xi that the United States is lowering the fentanyl tariff on Chinese goods to 10 percent from the current 20 percent and that China will end its embargo of US soybeans, an economically important export.

Beijing also agreed to pause controls it imposed on strategic rare-earth minerals and to suspend port fees for a year.

Da Wei, the director of Tsinghua University's Center for International Security and Strategy, wrote in Foreign Affairs magazine ahead of the Trump-Xi meeting that it represented a “narrow but important opportunity for the United States and China to enter a new phase of bilateral relations.”

“The United States and China do not have to be friends, but they do have to avoid being enemies,” he wrote.

Whether it leads to actionable momentum to strike a deal beyond deescalating this year’s trade tensions, or if it simply results in a temporary truce, remains to be seen.

"Both capitals will keep believing they can outlast and outmaneuver each other, working feverishly to erode the other’s leverage," Craig Singleton, a senior fellow at the Foundation for Defense of Democracies, a Washington-based think tank, told RFE/RL. "That’s the paradox of this relationship: interdependence without trust, competition without closure. Busan may have bought time, but little more."

Beijing and Washington negotiated for months with little tangible progress beyond a brief reprieve from tit-for-tat tariffs in May and progress could be even thornier as both sides try to tackle more tense issues, such as US export curbs on certain types of semiconductors or geopolitical topics like Taiwan.

Trump could also bring new issues to the negotiating table that would further complicate talks.

Shortly before his meeting with Xi, Trump posted on social media that he instructed the Pentagon to start testing nuclear weapons after a 30-year moratorium, saying China and Russia -- the world’s other major nuclear powers -- could catch up with the United States within five years.

It’s unclear exactly what Trump intends. In his post, he wanted to start testing “our Nuclear Weapons on an equal basis,” which could mean showing off the power of American missiles or undersea nuclear assets, rather than conduct an actual nuclear test. It’s unclear if Trump wants to see tests of missiles capable of delivering a nuclear weapon, or tests that involve actual nuclear explosions.

China’s expanding nuclear stockpile has been a fixation for Trump and also appeared in his rationale when he said that the United States needed to retake control of Bagram Air Base in Afghanistan.

The comments also come after Russia announced that it had successfully tested a nuclear-powered super torpedo called Poseidon on October 29 and praised the successful test of a nuclear-powered cruise missile just three days before.

Russian President Vladimir Putin, however, has so far abstained from testing a nuclear weapon or carrying out a nuclear detonation.

The first Trump administration tried to start three-way nuclear talks with Beijing and Moscow as Washington looked to negotiate a new accord to replace the New START treaty, a foundational piece of arms-control infrastructure, that will expire on February 5, 2026.

China rejected joining those talks in 2020, but the talk of future US tests could push Beijing to the negotiating table.

Russia suspended its participation in New START in February 2023, but it did not withdraw from the treaty, saying that it would continue to abide by the numerical limits in the treaty.

Did Beijing Overplay Its Hand On Rare-Earth Minerals?

Beijing shook global supply chains when it first brought in export controls in April on rare earth minerals. The move caused shortages overseas and highlighted China’s willingness to use its near monopoly on the 17 elements that make up smartphones, military drones, and medical devices.

Those curbs were expanded in October, specifically targeting elements in defense supply chains and the equipment used to process them.

While the agreement struck in Busan lifting those restrictions for a year, the fallout has already been severe.

Fearful of their dependence on China for the minerals, many Western countries have already looked to band together to create new supply chains, with the flow of rare-earths becoming a centerpiece of a G7 summit underway on October 30.

The European Union is also scheduled to sit down with China to discuss Chinese export controls on October 31.

European weapons producers supplying arms to Ukraine have warned that they could be affected by the shortage and the one year, restriction-free window could buy time for the United States and Europe to invest and procure new sources of minerals outside of China’s control.

Trump secured a number of rare earth and critical mineral deals before and during his trip to Asia, inking deals with Australia, Japan, Malaysia, Pakistan, Thailand, and Ukraine, among others.

“There is a sense that China may have overplayed its hand on rare-earths,” Ferenczy said. “This shows that there is appetite for collective action to counter weaponization of rare-earths by China.”