A Truce Built on Tariffs: Why the Trump-Xi Meeting is a Ceasefire, Not a Peace Treaty

The first face-to-face summit between U.S. President Donald Trump and Chinese President Xi Jinping in six years, held on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in Busan, South Korea, was framed by the U.S. side as an “amazing” breakthrough, yet its substance reads more like a meticulously calibrated economic ceasefire. The meeting, conducted against a backdrop of escalating tariff warfare and technological rivalry, yielded immediate, tangible concessions centered almost entirely on trade, leaving the deeper, geopolitical fault lines intact. For a world economy grappling with uncertainty, the consensus reached provides a crucial, if fragile, reprieve.

The most concrete outcome, announced immediately by President Trump, was a partial reduction in U.S. tariffs on Chinese goods. Specifically, the overall tariff burden was reduced from 57% to 47%, a 10% cut attributed directly to progress on the fentanyl crisis. Trump stated, “We’re cutting fentanyl tariffs down to ten per cent after very good talks,” signaling a transactional approach where a pressing American social issue, the opioid crisis, was linked to major economic leverage. In return, the Chinese side, while not issuing an immediate detailed governmental response, confirmed through state media that President Xi and Trump had reached “consensus” on trade issues and would “finalise follow-up work as soon as possible,” aiming to provide “tangible results to set minds at ease about the economies of China, the United States and the world.” The Chinese Ministry of Commerce later confirmed the temporary suspension of export controls on rare earth materials, a major geopolitical bargaining chip, for a period of one year, a move directly addressing a critical supply chain concern that had sent global markets scrambling since Beijing tightened controls on October 9th. Trump hailed this as “settled,” emphasizing that the deal on rare earths would be reviewed and renegotiated annually, underscoring the impermanent nature of the agreement. Furthermore, China has agreed to immediately resume large-scale purchases of American soybeans and other farm products, a vital economic relief valve for U.S. agriculture, a sector heavily targeted in the recent trade disputes.

However, the rapid-fire trade announcements mask the enduring strategic competition that defines the world’s most important bilateral relationship. Experts view the outcome with cautious skepticism. Craig Singleton, Senior Director of the China program at the Foundation for Defense of Democracies, noted that the proposed deal “fits the pattern we’ve seen all year: short-term stabilization dressed up as strategic progress,” arguing that “both sides are managing volatility, calibrating just enough cooperation to avert crisis while the deeper rivalry endures.” This sentiment is shared by geopolitical analysts, who point out that the high-stakes talks were aimed not at resolving the fundamental conflict over technology dominance, particularly in areas like Artificial Intelligence (AI) and semiconductors, but at preventing a full-blown economic collapse that could jeopardize the political fortunes of both leaders. Indeed, when pressed on the sale of advanced chips, Trump confirmed that the powerful Nvidia Blackwell AI chip was not included in discussions on increasing Chinese purchases of U.S. chips, maintaining a critical technological firewall.

The lack of discussion on Taiwan was perhaps the most telling silence of the summit. Amid rising concerns in Taipei that the U.S. might be willing to make concessions on the self-governed island, President Trump confirmed the issue was not raised. This omission, or strategic exclusion, sends a signal to regional American partners who rely on clear American deterrence messaging. The transactional focus on tariffs and trade relief suggests that these situations, which have been a point of friction between Washington and Beijing for decades, were deemed secondary to stabilizing immediate economic turbulence. The Brookings Institution had previously articulated Beijing’s likely negotiating posture, suggesting that China no longer feels compelled to reach an agreement “at any cost” and is instead negotiating from a position of “greater confidence,” seeking a “fairer and more balanced outcome.” The resulting agreement, which sees China suspending its rare earth export threat in exchange for tariff relief, seems to align perfectly with this calculated repositioning. The temporary truce achieved in Busan, while celebrated on financial markets, is therefore a functional agreement to lower the temperature on core economic hostilities, allowing both superpowers to return to the long-term, structural contest for global technological and geopolitical dominance with fewer immediate threats of escalation. The promise of a presidential visit to China in April next year merely underscores the mutual necessity of maintaining dialogue, even if that dialogue remains strictly transactional. The world, and particularly America’s allies in Asia, must now assess whether this short-term stability provides a reliable foundation for future regional security.