U.S. President Donald Trump emerged from his meeting with Chinese leader Xi Jinping beaming, labeling the conversation "truly great.”
But the one-year truce struck on Thursday in South Korea is likely to only stabilize relations between the world’s two largest economies rather than resolve fundamental differences, with both sides buying time to further reduce dependence on each other in strategic areas. And it made clear just how much stronger China has become since Trump’s first term in office.
Trump’s move to cut the fentanyl tariff and extend the existing truce on reciprocal tariffs will leave many products facing a levy around 47%, low enough for China’s massive manufacturing base to remain competitive with regional rivals. Just as significantly, the U.S. agreed to suspend a rule expanding restrictions on blacklisted Chinese firms, showing that Xi’s sweeping rare earth curbs could potentially put a cap on new U.S. export controls — something China has sought for years.
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