Xi and Trump find temporary truce as China plays longer game

October 30, 2025

Following a meeting between Donald Trump and Chinese President Xi Jinping in South Korea, the two leaders reached a preliminary agreement that would see the US lower tariffs on Chinese goods while China suspends export controls on rare earth minerals. Trump characterized the meeting as a tremendous success, while Beijing's measured response emphasized the need for further negotiations and follow-up work. The tentative truce represents temporary de-escalation in the trade war between the world's two largest economies, though it fails to address underlying structural tensions in their increasingly competitive relationship.

Who is affected

Donald Trump and the US government
Chinese President Xi Jinping and the Chinese Communist Party
US and Chinese negotiating teams
Global markets and businesses
American farmers in Republican states who produce soybeans
Countries caught between the US-China rivalry
Consumers and manufacturers dependent on rare earth minerals for smartphones, electric cars, and military equipment
Chinese citizens facing economic pressures from real estate crisis, high youth unemployment, and weak consumer spending

What action is being taken

Negotiators on both sides have been talking for months to iron out details
China has started buying soybeans from the US again
Teams on both sides are following up on the meeting agreement
The US is working to lower tariffs on Chinese imports (as part of the preliminary agreement)
China is suspending controls on rare earth exports (as part of the preliminary agreement)

Why it matters

This meeting represents a significant de-escalation in the trade war between the world's two largest economies, which has global implications for market stability and international trade. China's strategic use of rare earth export controls—given its 90% dominance in processing these minerals critical to advanced defense systems—demonstrates its newfound leverage and willingness to absorb economic pain to maintain its position. The encounter reveals a fundamental shift in the US-China power dynamic, with Beijing proving more resilient than during Trump's first term through trade diversification and strategic retaliation, signaling that China will not submit to US pressure and demands respect as an equal power.

What's next

No explicit next steps stated in the article

Read full article from source: BBC