The 100-minute Xi–Trump trade truce in Busan, Republic of Korea, delivered tactical de-escalation but dodged structural disputes, leaving rare earths leverage with Beijing and Washington exposed to supply chain vulnerabilities.
When Donald Trump emerged from his encounter with Xi Jinping on 30 October, he awarded the talks a rather generous 12 out of 10. Beijing, characteristically more restrained, called for keeping communication lines open whilst noting a “basic consensus” on economic ties. The brevity of the meeting—100 minutes against an anticipated three to four hours—spoke volumes about how shallow the foundations of this Xi–Trump trade truce actually are.
What the numbers reveal about the deal
The headline figures look superficially reassuring. U.S. tariffs on Chinese imports dropped from 57% to 47%, achieved by halving fentanyl-related levies from 20% to 10%. China agreed to resume soybean purchases and suspend export controls on five rare earth elements announced in October. Yet scratch beneath the surface and the picture darkens considerably.
Tang Gen from Beijing’s Taihe Institute dismissed the tariff reduction as “meaningless,” noting that any economist worth their salt understands that tariffs above 30% effectively terminate trade. Beijing had hoped for reductions to 20–25%, or at most 30%, to align with levies on other trading partners. Instead, China still faces substantially higher tariffs than when Trump first took office, despite all the diplomatic theatre in Busan.
Market reaction confirmed the scepticism. Soybean futures in Chicago actually fell after the summit, as traders expressed disappointment at the lack of concrete details. The agreement was widely seen as a “tactical truce” that left rattled multinational corporations with a fragile peace rather than a lasting resolution.
Rare earths: Beijing’s ace in the hole
The Xi–Trump trade truce exposed a rather uncomfortable reality for Washington. China controls approximately 70% of global rare earths supply and dominates refining capacity almost entirely. Dr Naoise McDonagh from Edith Cowan University put it bluntly in an interview with Capital Business: whilst U.S. technology restrictions might slow Chinese progress, if China cuts off these rare earth supplies, that can actually stop everyone’s industry. This, McDonagh noted, is the key difference—Beijing’s leverage lies in its ability to halt entire sectors, not merely disrupt them.
China first imposed export controls on seven rare earths in April 2025; The agreement pauses China’s newly announced export controls on several rare earth elements introduced in October 2025, while earlier restrictions imposed in April remain in place. This includes export limits on gallium and germanium, both critical for defence and semiconductor manufacturing. Joe Mazur from Trivium China observed that this year has vindicated Beijing’s strategy of never striking first but always striking back. Rare earths represent China’s primary leverage, and Washington lacks comparable tools to break that stranglehold.
American efforts to engage partners such as Australia, Japan, Malaysia, and Thailand in supply chain cooperation have been described by Prof Tim Harcourt from the University of Technology Sydney as part of “resetting globalisation in a post-Covid era.” Yet these arrangements cannot compete with Chinese cost advantages and technological lead in the short to medium term. The BBC noted that China’s dominance in rare earths processing gives it strategic advantages that Trump’s diversification agreements simply cannot match quickly enough.
Strategic patience meets political improvisation
Perhaps the most revealing analysis came from Melanie Hart at the Atlantic Council’s Global China Hub. She warned that Beijing uses calendar power to its advantage. With Trump scheduled to visit Beijing in April 2026 and Xi planning to attend the G20 in the United States in December 2026, the next 14 months will be consumed with preparations for these encounters.
Chinese leaders are strategic and their diplomats formidable, Hart noted. They know precisely what they want and where their red lines lie. There is no indication the American side possesses the same strategic clarity. Professor Stephanie Kam from Singapore’s Nanyang Technological University reinforced this assessment, observing that China’s state model grants it greater patience in negotiations whilst analysts believe Beijing thinks long-term, focusing on building its own industrial ecosystem to reduce Western dependencies.
What got left off the table
Xi Jinping urged both sides to focus on long-term cooperation benefits and avoid falling into “a vicious cycle of retaliation.” However, the meeting’s aim was merely to ease trade tensions, a goal that was “just about achieved” without tackling any core disputes. The fundamental issues that triggered the tariffs initially—China’s industrial policies, manufacturing overcapacity and export-led growth model—were sidestepped entirely.
Key structural issues like intellectual property protections and the strategic competition in artificial intelligence were largely ignored. Likewise, the sensitive topic of Taiwan was not mentioned, a point seen by some as a sign that Beijing felt no pressure to discuss it. The ongoing tussle over high-end semiconductors, a critical area for both nations, also remains a point of major friction, placing regional U.S. allies like South Korea in a particularly difficult position.
The agreement also highlights how dramatically the relationship has deteriorated since Trump’s first term. Back then, negotiators produced a comprehensive 96-page document covering intellectual property, banking and agriculture. This time, both sides offered relatively brief readouts focused mainly on rolling back threats made in the run-up to talks.
For Washington and Beijing, the table was smaller; for Europe, it’s no longer clear if there is one at all.
Europe squeezed between superpowers
When Trump sits down with Xi, no European is at the table, yet European interests hang decisively in the balance. The European Central Bank calculates that a staggering 80% of large European firms are no more than three intermediaries away from a Chinese rare earths producer.
Recent Chinese restrictions on rare earths exports sent panic through European capitals, threatening to halt automotive production lines and defence manufacturing. The case of Nexperia—the world’s largest mass market chip manufacturer—demonstrated Beijing’s willingness to weaponise supply chains. When the Dutch government seized control of the Chinese-owned firm, Beijing threatened to ban Nexperia exports, which would have paralysed European carmakers.
Euractiv warned that any truce between China and America will not herald a return to the free trade and open markets upon which Europe relies so heavily. If Europe is to remain a pole in the multipolar world, it needs to use whatever breathing space this summit provides to secure supply chains, reduce dependencies and establish control over its own chokepoints. The alternative is stark: next time the presidents of China and America meet, Europeans may find they are not at the table but on the menu.
Nuclear sabre-rattling changes the game
In a move that stunned diplomats, hours before meeting Xi, Trump announced the resumption of U.S. nuclear testing for the first time in 33 years, focusing on submarine capabilities. The timing was hardly coincidental.
Alicia García-Herrero from Bruegel called the announcement “really scary” and warned that market reaction could turn very negative if this represents genuine escalation on the nuclear rather than economic front.
The one-year expiration date
The Xi–Trump trade truce carries a one-year expiration date, underscoring its fragility. Based on precedent, it could unravel sooner—perhaps abruptly—should either side choose to withdraw.
Both the U.S. and Chinese economies remain exposed to the lingering effects of the nearly year-long trade war. Elevated tariffs, disrupted supply chains, and investor uncertainty continue to weigh on growth.
China faces a real estate crisis and sluggish domestic demand that have eroded consumer confidence. The United States confronts persistent inflationary pressures and weakening industrial output, raising fears of a broader slowdown.
Whilst temporary easing of tensions may offer short-term relief, analysts believe the risk of renewed escalation looms large without deeper reforms or sustained cooperation.
The Xi–Trump trade truce amounts to what Deutsche Welle aptly characterised as buying time, not trust.
Strategic and geopolitical implications
The summit avoided worst-case scenarios—no direct clash over Taiwan, no new deal on advanced chips. Yet it revealed American vulnerability in using economic pressure against China.
U.S. gains are minimal, such as soy exports and a partial reprieve on rare earth restrictions, and come at the cost of exposing economic dependence on China. Beijing retains its supply chain advantages, while stakes and mutual mistrust remain high.
China may have a short-term tactical edge, but Trump’s pivot toward overt military signalling could mark a more dangerous phase.
The structural rivalry for technological supremacy, economic hegemony, and geopolitical influence remains unresolved, shaping the international order for decades to come.
A seasoned geopolitical analyst might quip: “Busan was less a summit and more a 100-minute episode of ‘Who wants to blink first?’”
And perhaps add, with a wry smile: “If trade wars were boxing matches, both fighters just agreed to hug it out for a year—and neither knows who’s really winning the championship belt.”