Trump and Xi agreed to a one-year trade truce, easing tariffs and controls, although China’s deeper economic problems remain far from resolved.
US President Donald Trump and Chinese leader Xi Jinping agreed to a one-year trade truce, easing tariffs and controls.
The agreement appears to step back from plans Trump unveiled on October 10, when he said a 100% tariff would be imposed on Chinese imports along with new export controls on software. But just weeks later, talks between senior American and Chinese officials changed the narrative again, offering a glimpse of a potential deal that could avert a deeper conflict — at least for now.
During a meeting in South Korea, Xi reportedly pushed Trump to cut tariffs by 10%. The United States will also suspend port fees on Chinese ships, and postpone export restrictions that would have prevented additional Chinese companies from accessing American technology.
According to Trump, China has agreed to buy soybeans from American farmers and step up efforts to prevent fentanyl smuggling. This framework could also delay China’s restrictions on rare earth exports by a year while it reconsiders its policy.
US Treasury Secretary Scott Besent said on October 26 that negotiators had reached a trade framework that could prevent a 100% tariff increase. The talks took place against the backdrop of the Asia-Pacific Economic Cooperation Summit.
Despite Xi’s successful meeting, China’s deeper economic issues remain far from resolved.
Veena Nadjibula, vice-president of research and strategy at the Canadian Asia Pacific Foundation, noted that US tariffs have been framed in China as the main reason for its economic slowdown — but noted that the country’s problems go beyond tariff wars.
“The reality is that China’s slowdown is largely driven by structural domestic issues: a protracted real estate meltdown sapping household wealth and confidence, weak consumption, local government debt, and private sector caution after years of regulatory turmoil — problems that predated the latest rounds of tariffs,” Nadejibula says.
While US tariffs have undoubtedly disrupted Chinese exports, China, for its part, has adapted in some ways. For example, it is no longer as dependent on the United States as it was before, according to Wei Liang, a professor at the Middlebury Institute of International Studies. After all, the higher tariffs have been in place since 2018, Trump’s first term.
“Today, China’s largest trading partner is not the United States, but Southeast Asia and the European Union,” Liang says. So, a potential escalation of tariffs from 25% to 100% would have had a limited impact anyway.
Despite the recent meeting between Trump and Xi, tensions between the two countries have intensified and are likely to continue. What will change that? “Different leadership,” Liang adds. New leaders, whether in the United States or China, may choose different strategies and manage their bilateral differences better.
