FRAGILE TRADE TRUCE

Trade tensions between the United States and China appear to have entered a temporary phase of calm, though the underlying rivalry remains intact.

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Ahead of a meeting between President Donald ‘Trump and Chinese leader Xi Jinping, both sides signalled a willingness to cool their rhetoric, suggesting that a partial understanding had been reached. Yet the substance of this truce remains uncertain, for the economic and political incentives driving the confrontation are far from resolved.

‘The Trump administration's use of tariffs as a tool of leverage has become one of the most disruptive features of global commerce. China’ restrictions on the export of rare earth elements, essential to the manufacture of advanced technologies, were met with threats of 100 per cent tariffs on Chinese goods by Washington. The resulting standoff rattled supply chains and dampened global growth projections. Now, with signs of moderation, markets may breathe easier, but the fundamental contest over technological dominance and strategic autonomy continues to simmer beneath the surface.

At the annual ASEAN summit in Kuala Lumpur, Trump sought to showcase himself as both a dealmaker and peacemaker. ‘The setting provided a convenient stage for his twin ambitions: to stabilise economic ties with Beijing and to demonstrate American influence across a region long courted by China. His visit marked a renewed engagement with Southeast ‘Asia, an arena he had largely neglected during his earlier years in office. The ASEAN bloc, with its combined economy of nearly four trillion dollars and population of 680 million, represents a vital bridge between the Indo-Pacific powers. Trump's reappearance there was designed to reassure allies that the United States remains a committed player.