Tactical tariffs truce after US-China summit, but big questions left unanswered

Businesses have welcomed the relief in trade tensions, but analysts say it is not a structural reset

- Shweta Sharma

Donald Trump hailed Xi Jinping as a “great leader” after an “amazing” meeting in which the pair agreed to extend a tariffs truce and roll back some export controls, marking a pause in one of the most consequential trade wars between two of the world's largest economies.

The US president's face-to-face talks with his Chinese counterpart in the South Korean city of Busan, their first since 2019, marked the finale of a whirlwind Asia trip during which he also touted trade breakthroughs with South Korea, Japan and southeast Asian nations.

The outcome of the meeting is seen as a temporary truce as both sides offer short-term relief while leaving core disputes over trade, industrial policy, and global dominance unresolved.

The meeting between Mr Xi and Mr Trump on the sidelines of the Apec summit came months after the American leader kicked off a trade war with "Liberation Day" tariffs announced on 2 April.

In the outcome of the summit, Mr Trump agreed to lower US tariffs on China by 10 per cent - 57 per cent to 47 per cent - and lower fentanyl-linked tariffs from 20 per cent to 10 per cent. The overall deal brings trade relations roughly back to their pre-"Liberation Day" status.

The Chinese side, in return, agreed to resume soya bean purchases and suspend its rare earths export curbs for one year.

Mr Xi confirmed both sides had reached a consensus to resolve “major trade issues” and compared the US-China relationship to a ship at sea, saying the two nations must “stay on the right course” and “remain partners and friends”.

“The world is confronted by many tough problems ... China and the US can jointly shoulder our responsibility as major countries and work together to accomplish more great and concrete things for the good of our two countries and the whole world,” he added.