US-China Trade Truce: As U.S. President Donald Trump and China’s leader Xi Jinping prepare for crucial face-to-face talks this Thursday, renewed hopes are rising across global markets for a potential US-China trade truce. American negotiators have signaled they want the two economic superpowers to return to a fragile peace after weeks of rapidly intensifying trade tensions.
However, despite the optimistic atmosphere surrounding the upcoming meeting in Busan, South Korea—held on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit—experts warn that the deeper structural issues between the two countries are unlikely to disappear anytime soon.
This meeting marks the first in-person interaction between Trump and Xi since Trump’s first term, making it a high-stakes encounter watched closely by businesses, farmers, markets, and geopolitical analysts worldwide.
A Return to Diplomacy Amid a New Cold War Climate
President Trump has repeatedly voiced confidence that a deal can be reached with Xi. Yet the broader relationship between Washington and Beijing has become significantly more competitive over the past several years. Many analysts now describe their rivalry as the early stages of a “new Cold War,” with both economic and military dimensions.
The renewed urgency for dialogue comes after a dramatic escalation earlier this month. Beijing announced plans to impose sweeping new controls on exports of rare-earth minerals—critical components used across high-tech industries from smartphones to electric vehicles, and an area where China maintains near-total global dominance.
In response, Trump vowed to counter Beijing’s move with 100% tariffs on a broad range of Chinese goods. The U.S. administration also threatened restrictions on exports to China involving American-designed software and technologies—measures that could have had severe consequences for the global economy.
The result was a surge in market volatility and growing fears of a prolonged trade confrontation. This tense backdrop adds weight to the Busan meeting, making even a temporary US-China trade truce meaningful for global stability.
Washington Signals Progress on Rare-Earth Dispute
Following intense behind-the-scenes negotiations over the weekend, U.S. Treasury Secretary Scott Bessent indicated that both sides may be edging toward compromise. According to Bessent, Beijing is likely to delay its new rare-earth export controls for at least a year.
China also appears prepared to resume purchases of American soybeans, a vital export for U.S. farmers and a politically important sector for Trump.
In anticipation of the summit, China bought its first shipment of U.S. soybeans in several months, a sign interpreted by analysts as goodwill ahead of high-level talks.
Yet some experts warn that neither country is willing to give up strategic leverage. Ryan Hass, a senior China analyst at the Brookings Institution, said both governments will continue guarding critical supply chains and technologies.
“These chokepoints will remain—loaded guns resting on the table—while both leaders look for ways to reduce their national dependence on each other for essential inputs,” Hass noted.
More Trump-Xi Meetings Expected Through the Coming Year
The White House has signaled it wants this week’s summit to be the first of several Trump-Xi engagements across the next year. There is even talk of reciprocal state visits, suggesting that Washington and Beijing are preparing for a long and complex negotiation cycle.
Still, Trump is seeking early wins. With global businesses and financial markets watching closely, he has pushed for rapid progress on issues directly affecting American consumers and companies.
One of Trump’s immediate goals is the reduction of U.S. tariffs on Chinese goods—if Beijing follows through on efforts to curb the export of precursor chemicals used in manufacturing fentanyl. The synthetic opioid remains the leading cause of overdose deaths in the United States, making it a high-priority topic in U.S.-China diplomacy.
Trump has also publicly said he may finalize an agreement with Xi regarding TikTok. The social media giant faces a potential U.S. ban unless its Chinese parent company divests its American operations.
China, for its part, has expressed openness to constructive engagement. Foreign Ministry spokesperson Guo Jiakun said Beijing is ready to work with Washington for “positive results” from the summit.
Existing Tariff Deals Set to Expire Soon
Another looming issue adding weight to the Trump-Xi meeting is the scheduled expiration of earlier tariff agreements on November 10. Those deals had temporarily reduced retaliatory tariffs—bringing U.S. tariffs down to about 55% and China’s to roughly 10%—while also restarting American imports of rare-earth magnets from China.
Scott Kennedy, a China economic expert at the Center for Strategic and International Studies, said both sides may simply agree to extend the current arrangements without making deeper commitments.
“I expect, for the moment, they will kick the can down the road,” he predicted. “Whatever deal emerges is unlikely to be substantive or long-lasting.”
Kennedy added that the talks will not address long-standing U.S. frustrations over market access in China or Beijing’s industrial overcapacity—issues that have been central to American complaints for decades. “For China, that’s already a victory,” he said.
What Beijing Wants in Exchange
While Washington has demanded action on fentanyl, Beijing has its own set of expectations. China has pushed for the removal of 20% tariffs linked to fentanyl trade, relaxation of U.S. export controls on sensitive technologies, and reversal of new port fees imposed on Chinese vessels.
These port fees were introduced by the U.S. to counter what it views as China’s growing dominance in industries such as shipbuilding, logistics, and global ocean freight.
Treasury Secretary Bessent confirmed that Beijing has agreed to help reduce the flow of fentanyl precursors but did not specify whether Washington had offered any concessions in return.
Alex Gray, former chief of staff at the White House National Security Council and now CEO of American Global Strategies, said Trump is aware that he needs visible Chinese concessions to avoid further escalation. He noted that Trump prefers to strike an economic agreement rather than intensify the trade war, but will insist on meaningful gains.
Rare-Earth Partnerships With Japan and Southeast Asia Add Pressure
Trump’s meeting with Xi comes at the tail end of a five-day diplomatic tour through Asia. During the trip, Trump signed key agreements with Japan and several Southeast Asian nations to strengthen collaborations on rare-earth minerals.
These deals are designed to reduce global dependence on China for rare-earth supplies—strategic materials used in electric cars, advanced defense systems, satellites, missiles, and fighter jets.
By forging new alliances, Washington aims to weaken Beijing’s leverage and create alternative global supply chains. This adds another layer of tension to the upcoming discussions, since rare-earths remain one of China’s most powerful bargaining tools.
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Rising Tensions Over Taiwan Hover Over the Summit
While trade disputes dominate headlines, regional security issues—especially concerning Taiwan—cast an even more serious shadow over the Trump-Xi meeting.
Taiwan, a highly advanced technology hub and a close U.S. partner, is claimed by Beijing as sovereign territory. The island has become one of the sharpest flashpoints in the U.S.-China rivalry.
Over the weekend, Chinese state media reported that H-6K bombers conducted “confrontation drills” near Taiwan, a move seen by analysts as a direct message to Washington.
Despite the military maneuvers, U.S. Secretary of State Marco Rubio sought to reassure Taipei. He insisted that Taiwan should not worry about this week’s negotiations, despite speculation by some analysts that Trump might consider concessions involving the island in exchange for a broader strategic agreement with Beijing.
Former White House official Alex Gray rejected these fears, calling them “a Washington think-tank fever dream.”
“We hear this over and over, and it never comes to pass,” Gray said. “In fact, Trump ends up expanding ties rather than reducing them.”
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A Cautious Road Ahead for the US-China Trade Truce
As Trump and Xi prepare to sit across the negotiating table in Busan, the world is watching for signs of stability. Even a temporary US-China trade truce would help calm markets, reassure global companies, and ease pressure on critical industries—from agriculture to semiconductors to shipping.
Yet observers widely agree that while a near-term deal is possible, lasting peace remains unlikely. The rivalry between the world’s two largest economies now extends far beyond tariffs. It encompasses supply-chain power, technological supremacy, national security, energy independence, rare-earth control, and geopolitical influence.
The Busan summit may deliver short-term relief, but the broader contest is likely to shape global politics for years to come.
