Opinion Trump-Xi ‘G2’ Meet | From Busan, a question: Is the chaos of trade wars subsiding?

The Trump-Xi meeting can be viewed as a positive step toward resolving issues through negotiations rather than confrontation. The US and China are systemic players, and conflicts between them have global repercussions

The Busan meeting came towards the end of Trump’s extensive six-day tour to Southeast Asia and East Asia.

October 31, 2025 12:49 PM IST First published on: Oct 31, 2025 at 12:49 PM IST

The two global superpowers, the US and China, often referred to as G2, are trying hard to recalibrate their ties and find a new equilibrium. They seek to do so in an evolving world to avoid potential conflicts in the realms of trade and security. The Trump-Xi meeting in Busan is consequential not merely as diplomatic grandstanding, but as a potential inflection point that can temper the recent turbulence and give new direction to bilateral ties. Further, it has the potential to diffuse tensions in East Asia and halt the escalation of the trade war between the two leading powers. Nonetheless, a lot will depend on the way these states manage their conflicts and develop institutionalised collaboration in the field of trade and global governance. A few experts believe that the Busan meeting can contribute to the emergence of a G2 or global bipolarity, something akin to the Cold War politics. However, the evolving geopolitical trends indicate that the world is likely to be multipolar rather than bipolar in the coming years.

In the last few months, tensions between China and the US flared up because of punitive reciprocal tariffs, conflicting stances on global conflicts, and confrontational language. While the Trump administration slapped a 100 per cent tariff on Chinese imports and restricted the supply of advanced semiconductor chips, Beijing responded by imposing export controls over rare earth materials and related processing technologies. These measures have the potential to disrupt the global supply chain as China produces about 90 per cent of the processed rare earths and rare earth magnets. These elements are critical for the manufacturing of electric vehicles, heavy industries, smartphones, jet engines, and military technologies. However, good sense prevailed, and the two sides realised the pitfalls of their structural bifurcation and the interdependence of their economies. They sounded tough and flexed their muscles in public, but were willing to cut a deal.

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The Busan meeting came towards the end of Trump’s extensive six-day tour to Southeast Asia and East Asia. He visited Malaysia, Japan, and South Korea. His tour was an attempt to reassure the Asian governments, which have traditionally leaned on the US for their security, but are now wary of Trump’s unpredictability amid growing Chinese assertiveness. In Kuala Lumpur, he signed trade deals with the ASEAN member countries and oversaw the peace deal between Cambodia and Thailand. In Japan, he met the newly elected woman prime minister, Sanae Takaichi, and addressed the US military at Yokosuka Naval Base. In South Korea, he signed a trade deal and addressed business leaders. These countries are vital for the US strategic interests in the Indo-Pacific as they work as a bulwark against the growing Chinese influence.

And finally, in the beach city of Busan, Trump met Xi. This was the first in-person meeting of the two leaders in the second term of Trump’s presidency. The two leaders expressed their satisfaction and indicated that the trade deal would be signed very soon. A real trade deal would imply that the US would have to cut tariffs to between 15 and 20 per cent for most of the Chinese products. That is the range of tariffs imposed on European and Japanese exports. Reports indicate that China has agreed to supply rare earth material to the US for a specified period. Trump reduced the fentanyl-related tariff to 10 per cent.

The exact details on TikTok are not yet clear, but the negotiators seem to have reached a deal. TikTok is a short video platform popular in the US. The Trump administration had expressed concerns that TikTok poses a national security threat because ByteDance, the parent company, was based in Beijing. The value of the US assets of TikTok was estimated to be about $14 billion. According to prior reports, the deal ensures American control over the TikTok algorithm, data is to be stored in the US, and the majority investment would be from the US.

One is not certain whether the two sides discussed the issue of Taiwan. Trump does not seem to have a clear policy on Taiwan. He somehow believes that Beijing will not risk its trade ties with Europe and America by invading Taiwan. The US policy of strategic ambiguity over Taiwan will persist.

The Trump-Xi meeting can be viewed as a positive step toward resolving issues through negotiations rather than confrontation. The US and China are systemic players, and conflicts between them have global repercussions. Their tempering of tensions will help stabilise international trade and alleviate fears of disruptions to global supply chains. It will also ease tensions in the Indo-Pacific. For New Delhi, two lessons emerge: remain firm in dealings with the Trump administration, and avoid putting all its eggs in one basket.

The writer is Professor, School of International Studies, Jawaharlal Nehru University, Delhi