US President Donald Trump has described his meeting with Chinese President Xi Jinping as ‘extraordinary’. At the same time, he also gave the meeting a ‘12’ out of 10. However, in the eyes of analysts, this agreement or agreement between the two leaders in the ongoing trade war between the US and China is actually a kind of fragile ‘ceasefire’, the main problems of which are still unresolved.
The framework in which the US will resume buying soybeans from China, suspend controls on rare earth exports for a year, and reduce the US tariffs on China by 10 percent on Thursday effectively returns the relationship between the two countries to the state before Trump’s ‘Liberation Day’ campaign. It is worth noting that on April 2 of this year, Trump declared Liberation Day and demanded the beginning of US economic freedom by imposing trade tariffs on China.
After the Busan meeting, there is a fundamental discrepancy between what Washington wants and what Beijing is ready to give. The discussions missed key issues that led to Trump’s tariffs, such as China’s industrial policy, overproduction and export-led growth model.
“What are we really talking about? We’re talking about reducing the number of countermeasures that both sides are taking,” said Emily Kilcridge, director of the Center for a New American Security. The outcome of the meeting showed Xi taking a new pragmatic approach to dealing with the United States, using tools such as export controls to get a quick response.
One official said the Chinese delegation’s expectations were realistic. They knew the meeting would not bring about a fundamental change in the relationship between the two countries. But they were pleased with Trump’s positive tone and the way the meeting was presented as a “G2” or meeting of two superpowers.
The official added that Beijing sees the meeting as a platform for broader dialogue that could help the two countries stabilize their ties.
World-class leaders:
The warm meeting between the two leaders after a long period of tension and Trump’s promise to visit Beijing next year are seen as positive. Analysts say it has brought some relief to multinational companies in the midst of a trade war.
At the start of the meeting before the APEC summit, Xi said that China’s development and resurgence are not incompatible with President Trump’s goal of making America great again.
Xi also said, “I look forward to working with Trump to lay a solid foundation for China-US relations and create a favorable environment for the development of the two countries.”
Trump was elated after the meeting. He praised Xi as a great leader of a great country. “This is how two world powers should treat each other,” he said.
“In the short term, the agreement and its framework are a way for the two countries to communicate. They can gradually adjust their interests and maintain continuity in the talks,” said Bo Zhengyan, a partner at Shanghai-based research firm Plenum.
The difficult situation:
The agreement gives both sides some time. Just as Trump achieved diplomatic success before his April visit to Beijing, he also received some relief from the high US tariff pressure. But this strategic truce is not complete. China’s recent license controls on rare earth exports have only been delayed, not canceled. With previous sanctions in place, US factories are still struggling with raw material supply uncertainty.
“This year, we have seen China’s ‘strike first, strike later’ strategy fully succeed,” said Joe Mazur, a geopolitical analyst at Trivium China. “It is now clear that rare earths are China’s main weapon of influence, and the United States has no comparable power or alternative to respond to them,” he added.
Da Wei, director of the Center for International Security and Strategy at Tsinghua University, warned that “if such tensions continue to escalate, the two leaders’ personal patience and trust will also run out.” He added that “if patience is lost, we will face a very difficult situation.”
