On October 30, 2025, during the Asia-Pacific Economic Cooperation (APEC) Summit held in Busan, South Korea, the meeting between U.S. President Donald Trump and Chinese President Xi Jinping went down in history as a critical diplomatic move that temporarily eased trade tensions between the two superpowers. The summit resulted in the reduction of fentanyl tariffs from 20% to 10%, lowering the overall tariff burden from 57% to 47%. Additionally, China agreed to suspend its export restrictions on rare earth elements for one year and to resume purchases of U.S. soybeans and sorghum.[i] In return, the United States postponed for one year the expansion of export controls targeting Chinese firms on its entity list.[ii] During the 1-hour-and-40-minute meeting, both leaders emphasized “success”: Trump described it as a mutual gain, while Xi called for partnership and friendship.[iii]
The main issue in this meeting lies at the intersection of the trade war, geopolitical rivalry, and supply chain vulnerabilities. In particular, the meeting raises the question of whether this “pragmatic compromise” can be sustained in the long term. Although the summit did not resolve the “Four Ts” issues, which are Taiwan, Transshipments, TikTok, and Technology, it opened the path for diplomatic engagement scheduled for April 2026. Historically, it represents a revision of the Phase One Agreement from Trump’s first term (2020), yet geopolitical divergence appears likely to persist.[iv]
The actors of the Busan Summit display sharp asymmetries in terms of power resources, strategic objectives, and structural constraints. These dynamics clearly reveal that the meeting represented a tactical ceasefire rather than a halt to the strategic divergence in U.S.–China relations.
The United States’ power rests on tools of economic coercion such as tariff barriers reaching up to 57%, military signaling demonstrated by a pre-summit nuclear test order, and intense domestic lobbying pressure from agricultural states. Trump’s strategic objectives are multilayered: to neutralize the fentanyl crisis, causing 50,000 deaths annually, as a domestic political liability; to provide a short-term buffer against the rare earth shortage that led to Ford factory closures; and to position China as a mediator in the Ukraine conflict in order to diplomatically isolate Russia. From an analytical perspective, Trump’s statement “Our farmers will be very happy!” represents an electoral victory narrative tied to soybean purchases and aimed at the 2026 midterm elections. However, the fact that the U.S. relies on China for 80% of its rare earth supply remains a structural vulnerability. This exposes the fundamental contradiction between realist power projection and the liberal imperatives of domestic politics.[v]
China’s global economic power rests on two key pillars. The first is its monopolistic position within global supply chains. According to data from the International Energy Agency (IEA), China accounts for approximately 92% of the world’s rare earth element processing. This dominance makes China an indispensable actor in strategic sectors such as high technology, defense industries, and green energy production. The second pillar is its export dependence on the U.S. market, with roughly 17% of China’s total exports directed to the United States. This interdependence renders the economic relationship between the two countries both mutually reliant and inherently fragile.[vi]
Xi’s current strategic objectives are primarily defensive in nature. They aim to offset China’s vulnerabilities in the fields of technology and resources while safeguarding its domains of national sovereignty. By suspending the U.S. “50% rule” applied to the entity list, Beijing seeks to protect strategically important technology companies such as Huawei and ZTE. At the same time, it maintains control over rare earth elements, using them as a tool of geoeconomic leverage, and reaffirms its red line on sovereignty by emphasizing that China’s regional issues are not open to negotiation.[vii]
South Korea, meanwhile, positions itself on the diplomatic mediation side of this geoeconomic equation. Under the leadership of Lee Jae-myung, the government aims to establish a symbolic zone of regional reconciliation through the summits hosted in Busan. Its strategic objectives include securing U.S. approval for a nuclear submarine program and creating a supply chain bridge within the ASEAN-U.S.-China triangle. However, the country’s limited diplomatic maneuvering space is constrained by the persistent threat from North Korea and its high export dependence on China (25%). In this context, South Korea exemplifies a micro-level case of liberal institutionalism. The effort to transform Busan into “Asia’s Camp David” is particularly noteworthy.[viii]
Secondary actors such as ASEAN and Japan are seeking to gain strategic leverage by developing alternative supply chains and engaging in soft power diplomacy. Their primary goal is to reduce uncertainty in global trade and enhance geoeconomic predictability. However, competition with China and the unpredictability of Trump’s political style remain major obstacles to these efforts. Although Japan’s minerals agreement reflects a liberal diversification strategy, the Trump administration’s preference for a friendship-based foreign policy over institutional trust has produced a fragile diplomatic framework grounded in personal relationships rather than stable institutions.[ix]
The diplomatic momentum generated by the Busan Summit shapes strategic scenarios for the 2025–2030 period around three main axes of possibility. These scenarios have been developed by considering existing uncertainties and expert assessments. The most probable scenario, which is the continuation of the status quo (60%), envisions the maintenance of current cooperation dynamics. The reciprocal leadership visits expected in April 2026 and the sustained trade in agricultural products are projected to reinforce short-term economic stability, contributing to a 1.5% increase in the global economy and approximately 10% growth in ASEAN exports.
By contrast, the escalation scenario (25%) could be triggered by a regional crisis or potential violations related to the entity list. In this case, tariffs could exceed 60%, supply shortages in rare earth elements could deepen, and the risk of a global recession would likely increase. The least probable (15%) but most transformative scenario, a full diplomatic resolution, appears feasible only through potential joint mediation initiatives in Ukraine and the establishment of high-level dialogues within the technology sector (for instance, at the level of the Nvidia CEO). This scenario could trigger a new “Phase Two”–type agreement process, paving the way for the reintegration of global supply chains.
In conclusion, the Busan Summit appears to have recalibrated the strategic balance through a pragmatic process of tension reduction. While Trump’s statement that the parties “agreed on almost everything” projects an image of short-term stability, geopolitical vulnerabilities such as the uncertainty surrounding the “Four Ts” and renewed nuclear test signaling, continue to hinder the prospects for a lasting resolution.
[i] “Live: Trump says he has struck deals with China’s Xi on tariffs, rare earths, fentanyl and soybeans”, Reuters, https://www.reuters.com/world/us/live-trump-xi-meet-south-korea-trade-2025-10-30/, (Access Date: 30.10.2025).
[ii] “Trump shaves China tariffs in deal with Xi on fentanyl, rare earths”, Reuters, https://www.reuters.com/world/china/looming-trump-xi-meeting-revives-hope-us-china-trade-truce-2025-10-29/, (Access Date: 30.10.2025).
[iii] “Donald Trump says rare earths dispute ‘settled’ and China to resume buying US soybeans after Xi Jinping talks – live”, The Guardian, https://www.theguardian.com/world/live/2025/oct/30/donald-trump-xi-jinping-meeting-live-updates, (Access Date: 30.10.2025).
[iv] “Trump lowers tariffs on China and announces end to ‘rare earths roadblock’ after Xi meeting”, BBC, https://www.bbc.com/news/live/cd7ry3x0nvet, (Access Date: 30.10.2025).
[v] “October 30, 2025 – Trump-Xi meeting”, CNN, https://edition.cnn.com/politics/live-news/trump-south-korea-china-xi-government-shutdown-10-29-25, (Access Date: 30.10.2025).
[vi] “Trump lowers tariffs on China and announces end to ‘rare earths roadblock’ after Xi meeting”, BBC, https://www.bbc.com/news/live/cd7ry3x0nvet, (Access Date: 30.10.2025).
[vii] Ibid.
[viii] “October 30, 2025 – Trump-Xi meeting”, CNN, https://edition.cnn.com/politics/live-news/trump-south-korea-china-xi-government-shutdown-10-29-25, (Access Date: 30.10.2025).
[ix] Ibid.
