Donald Trump and Xi Jinping recently concluded crucial trade talks in Busan, South Korea, on the sidelines of the Asia-Pacific Economic Cooperation (Apec) summit, marking their first face-to-face meeting in six years. Despite being shorter than anticipated, lasting an hour and 40 minutes, Trump described the discussions as “amazing” and rated the meeting a “12 on a scale of one to 10,” highlighting a significant breakthrough in months of global economic turbulence. Xi Jinping, while not directly commenting on the meeting’s outcome, acknowledged that economic and trade teams from both countries had reached a “basic consensus on addressing our respective major concerns” during prior talks in Kuala Lumpur.

The US-China trade relationship had been fraught with aggressive rhetoric and escalating tariffs, with Trump threatening duties as high as 145% and China vowing to “fight to the end.” This latest meeting aimed to de-escalate tensions and establish a framework for future relations. Key to this de-escalation was the agreement reached in Kuala Lumpur, which included a 10% reduction in Trump’s so-called “fentanyl tariff” imposed on Chinese goods, alongside reciprocal measures by Beijing to suspend export controls. This consensus paved the way for the Busan summit.

One of the most globally significant outcomes was the resolution regarding rare earths. China, which controls nearly all the mining and processing of these critical minerals essential for everything from smartphones to fighter jets, had recently announced a ban on rare-earth exports with potential dual military or semiconductor uses. Trump declared that the dispute had been “settled,” with China ending its restrictions on rare earth exports under a one-year agreement, which he expects to be renewed annually. China’s commerce ministry later confirmed the suspension of export controls that were announced in October.

Another major point of agreement concerned fentanyl, the synthetic opioid that has caused a surge of overdose deaths in the United States. Trump stated that Xi Jinping agreed to “work very hard” to prevent the production and flow of fentanyl precursor chemicals. In response, Trump immediately reduced the specific fentanyl-linked tariffs on Chinese products from 20% to 10%. China’s commerce ministry corroborated the suspension of these tariffs, along with other countermeasures.

Beyond tariffs, China also agreed to resume purchasing American soya beans, reversing restrictions that had severely impacted US midwest farming interests. This move is expected to alleviate pressure on American farmers who had faced significant losses due to the trade dispute.

Several issues, however, remained either unresolved or undiscussed. Taiwan, a self-governing democracy whose annexation is a primary aim for Xi, was explicitly “not discussed” during the meeting, despite concerns in Taipei about potential US concessions. The war in Ukraine “came up very strongly,” with both leaders agreeing to work together for progress, though no specific actions or strategies were detailed. Trump acknowledged China’s significant purchases of Russian oil but noted that this topic was not specifically discussed.

Regarding technology, Trump mentioned discussions about China buying US chips from Nvidia, but unequivocally stated that Nvidia’s new Blackwell AI chip – a powerful, albeit deliberately limited, product designed for the Chinese market – would not be sold to China, citing national security concerns. The status of the “phase one” trade deal from Trump’s first term also remains unresolved, with the US investigating China for not fulfilling its commitment to increase purchases of US goods and services by $200 billion annually. Additionally, the terms for ByteDance’s divestment of TikTok America are expected to be announced separately.

The meeting also laid the groundwork for future diplomatic engagements. Trump announced he would visit China in April, a long-expected trip, and indicated that Xi Jinping would reciprocate with a visit to the US sometime thereafter, potentially in Florida or Washington D.C. While Trump viewed the meeting as a triumph, many analysts see it more as a “truce” rather than a “durable peace,” describing it as a “framework agreement” that lacks crucial details. The past six months of trade conflict have seen both sides learn about each other’s leverage and vulnerabilities, with China demonstrating resilience in diverting exports and its stock market performing strongly, while US inflation figures have risen due to tariffs. The contrasting leadership styles, with Xi favoring a “war of position” and Trump a “war of manoeuvre,” further underscore the complexities of the US-China relationship.