The United States–China Trade Truce: A Pause, Not a Solution

 

The United States–China Trade Truce: A Pause, Not a Solution

The meeting between Donald Trump and Xi Jinping in South Korea appears to have halted an immediate global trade escalation — yet it falls far short of a strategic win for Washington. 

A De-escalation But Not a Breakthrough

Following the summit, the two leaders offered divergent narratives: Trump hailed the discussions as “amazing” and gave them a 12 out of 10; Xi took a more measured tone, indicating that a consensus had been reached and that further steps would soon follow. 
In effect, the US blinked first — trimming its tariff stance and suspending some escalating export-controls — as Beijing held its position. 

Underlying Challenges Still Intact

While this may buy breathing space, the deeper strategic contest remains unresolved. The US is retreating from key global institutions and trading frameworks, while China is accelerating initiatives to reduce economic vulnerabilities and expand its global influence.
For US businesses and global markets, the overriding problem is uncertainty: if bilateral ties are now unpredictable and US policy is volatile, firms can scarcely plan ahead.

A Wider Implication for Global Players

This is not just a US–China show; other countries and blocs must adapt. Trust in Washington’s consistency has eroded, compelling allies and partners to hedge. Meanwhile, China’s capacity to weaponise access to key inputs — notably critical minerals and rare earths — has triggered concern beyond US borders. 

The Bottom Line

Today’s agreement is a tactical retreat from the edge — but not a strategic victory. Without structural remedies to trade dependencies, technological competition, and institutional coordination, the underlying fractures between these two major powers will persist — posing risks not only to them, but to the broader global economy.