China grants a one-year truce, not a partnership. Washington still misreads the balance of power.
The Busan meeting between Donald Trump and Xi Jinping on 30 October was billed in parts of the Western press as a reset in United States–China relations. In reality, it was a limited ceasefire in a prolonged economic war that the United States is steadily losing. The structure of the meeting, the content of the statements, and the pattern of concessions on both sides show that Washington is no longer in a position to dictate terms. What took place in Busan was not a re-foundation of a global order under a joint G-2 umbrella, but an improvised truce by an American administration facing domestic political pressure, economic fragility, and a recognition of structural dependence on Chinese industrial and technological strength.
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Pepe Escobar, writing from Busan, observed that the G-2 gathering “felt like a switch from Trump Tariff Temper Tantrum to Temporary Truce.” He noted that the discussions lasted barely ninety minutes and ended with “a smiling handshake coda” but no substantive agreement beyond a pause in escalationTrump, Xi and G2. This corresponds with the wider evidence that the United States has retreated from punitive tariffs that it had neither the industrial capacity nor the political endurance to sustain. The essential framework of the truce is that Washington will suspend the 24 per cent reciprocal tariffs it imposed in April 2025 and roll back the 10 per cent “fentanyl tariff” that had served no practical economic purpose. In exchange, Beijing will reopen restricted flows of rare earth metals and resume agricultural purchases, particularly of soybeans.
The structure of the exchange reveals who holds leverage. China’s concessions were reversible and largely symbolic. The United States gave ground on measures that had inflicted domestic pain and achieved little strategic advantage. This echoes the pattern that independent economists such as Michael Hudson and Jeffrey Sachs have identified in the broader trade conflict: Washington’s resort to tariffs, sanctions, and export controls has weakened its own industrial base while accelerating China’s move toward self-sufficiency.
The first and most visible element of China’s advantage is its command of the global rare-earths supply chain. By 2024 China accounted for over 60 per cent of global rare-earth mining and roughly 90 per cent of refining. The United States attempted to rebuild its own refining capacity, but even Pentagon-linked analysts such as those at the Center for Strategic and International Studies warned that alternative supply chains would take a decade or more. When Beijing restricted rare-earth exports in response to Washington’s chip sanctions, it exposed the vulnerability of the U.S. military-industrial complex, whose weapons systems and advanced electronics depend on Chinese inputs. This explains why Trump’s negotiators pressed for the easing of those restrictions in Busan: the constraint was crippling U.S. defence procurement schedules.
Escobar reported that one of Trump’s main objectives was precisely to persuade Beijing to lift rare-earth controls because the U.S. industrial-military complex “cannot be affected by a supply-chain rupture, and there’s no way to build one in less than five years.” That estimate is consistent with assessments from independent American geologists such as James Kennedy, who has argued that domestic recovery of the necessary minerals cannot meet defence demand before the mid-2030s.
The second pillar of Trump’s demands concerned agricultural purchases. Chinese imports of American soybeans had collapsed after Washington’s tariff escalations. U.S. farmers, a core component of Trump’s electoral base, were facing bankruptcies and a collapse in commodity prices. According to Escobar, Beijing played its position shrewdly, using Brazil’s price increases to negotiate discounts from U.S. producers. The resulting deal allows China to secure cheaper inputs while giving Trump a talking point for his domestic audience. It does not change the structural direction of trade. Brazil and Argentina have become long-term suppliers to China, and no temporary purchase commitments can reverse that diversification.
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The third demand from Washington, that China curtail its energy cooperation with Russia by buying more U.S. oil and gas, was rejected outright. That refusal goes to the heart of the geopolitical realignment now consolidating across Eurasia. China’s partnership with Russia is the backbone of the multipolar order that is replacing the Western-centric system built after 1945. Energy integration between Moscow and Beijing, through pipeline gas, nuclear collaboration, and joint refining ventures, underwrites that shift. To expect China to undermine that partnership for marginal access to U.S. hydrocarbons was unrealistic. Escobar described this element of the American proposal as “dead on arrival.”
The meeting therefore produced minor, reversible adjustments rather than a strategic settlement. Chinese commentators framed the encounter not as a negotiation of equals but as an exercise in patience. Xi Jinping used maritime metaphors, “navigating through winds, waves and challenges to ensure the steady sailing of the giant ship of China-U.S. relations”, to signal that Beijing views the U.S. as a turbulent actor within an essentially long-term process. Other ministerial statements reinforced the message of “mutual achievement and common prosperity,” an old Chinese formula expressing coexistence rather than alignment. The remarkable addition was a sentence declaring that “China’s development and revitalisation and President Trump’s goal of making America great again are not mutually exclusive.” This was a diplomatic courtesy, not a concession. It underscored Beijing’s self-confidence and its judgment that Washington’s antagonism is a passing phase rather than an existential threat.
The independent academic Zhao Minghao of Fudan University characterised the outcome as a “tactical détente rather than a strategic reset.” His formulation captures the moment precisely. The Busan meeting did not resolve the technology war, the export controls on advanced semiconductors, or the political confrontation over Taiwan. None of these were even mentioned in the public communiqués. Escobar confirmed that “not a word” was spoken about semiconductors or Taiwan. Beijing sees no need to bargain over areas where it holds a long-term advantage.
The broader strategic picture supports that reading. China’s domestic industrial policy, anchored in state planning, public ownership of strategic sectors, and targeted technological investment, has moved it rapidly up the global value chain. Independent research by the Australian Strategic Policy Institute, an organisation generally hostile to China, conceded in 2024 that China was leading in fifty-seven of sixty-four critical technologies. Twenty years earlier the United States led in sixty. The shift represents the most rapid technological power transition in modern history. It explains why Beijing can afford to wait out U.S. pressure while accelerating internal innovation.
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The so-called “chip war” launched by Washington has had the opposite effect to that intended. The Biden and Trump administrations both sought to block Chinese access to high-end semiconductors and design tools, assuming that this would cripple China’s technological rise. Instead, China redirected state funding toward domestic semiconductor development. By 2025 it was producing the majority of the world’s “legacy chips” used in mass-market technologies. The U.S. Commerce Secretary Gina Raimondo herself acknowledged that about 60 per cent of new legacy chips in coming years will be Chinese. Independent analysts such as Dan Wang of Gavekal Dragonomics have observed that export controls have driven a “surge of self-reliance” that Western governments cannot easily reverse.
Beijing’s control of rare-earths and its rapid gains in semiconductor capacity thus complement each other. They create a dual lock on the inputs of modern industry: the materials and the microchips. Washington’s options are constrained by the economic dependence of its own corporations on Chinese supply chains. Escobar observed that “the tech expectation is that [China] won’t need anything from the U.S. in two to three years.” That expectation is now widely shared across the Global South, where governments see China’s resilience as evidence of a new development model insulated from Western coercion.
The geopolitical meaning of the Busan meeting lies in this asymmetry. Trump’s approach combined personal bravado with electoral calculation. With midterm elections looming and his approval ratings below forty per cent, he needed a foreign-policy spectacle that could be sold as success. The domestic economic data were grim. Manufacturing employment had fallen by over forty thousand jobs since the April escalation of tariffs. Inflation, driven in part by those tariffs, remained above three per cent. Analyses by Goldman Sachs and by independent economists such as Dean Baker confirmed that over half of the cost of Trump’s tariffs was borne by American consumers. These tariffs functioned as regressive taxes, raising prices on imported goods while leaving corporate profits untouched.
The political logic of a temporary truce is therefore obvious. Trump could present the Busan handshake as evidence of his negotiating prowess, reassure his farming constituency with promises of Chinese purchases, and claim that he had protected U.S. industry from rare-earth shortages. In practice he had merely suspended a conflict that Washington cannot win. The underlying imbalance in production capacity, technological momentum, and market leverage remains.
Independent strategic commentators from across Asia, such as Kishore Mahbubani and Victor Gao, have long argued that U.S. policymakers persist in a mental framework of unipolar dominance that no longer corresponds to material reality. Mahbubani has written that “the era of Western dominance is over not because the West has declined, but because the rest have risen.” The Busan meeting demonstrates that point vividly. The United States sought to extract concessions from China as it once did from subordinate partners. It encountered instead a peer power that could absorb economic blows and retaliate with precision.
The reaction of the Global South further reinforces this trend. During the same week as the G-2 meeting, China advanced the yuanisation of energy trade by expanding petroyuan agreements with Gulf monarchies and inviting BRICS partners to use its Cross-Border Interbank Payment System. Xi’s subsequent speech at the APEC summit emphasised “inclusive economic globalisation” and the building of an “Asia-Pacific community” rather than the U.S.-sponsored “Indo-Pacific” concept. The timing was deliberate. It signalled that Beijing sees its long-term alignment with the Global South as the core of its foreign policy, while relations with Washington are a management problem, not a strategic axis.
Independent observers such as the Indian economist Prabhat Patnaik and the Brazilian analyst Elias Jabbour interpret this as confirmation that the world economy is entering a post-Western phase of plural industrial centres. From that perspective, a genuine G-2—the idea of the United States and China jointly governing the world economy, is neither feasible nor desirable. For the U.S. establishment, such an arrangement would imply the abandonment of the “China containment” policy that has structured American strategy for a decade. That policy, as Escobar and others note, is embedded in the interests of the military-industrial complex, the technology monopolies, and the political culture of Sinophobia. No administration in Washington could dismantle it without provoking internal revolt.
The structural obstacles are decisive. Ending sanctions on Chinese technology firms such as Huawei and BYD would devastate U.S. corporations like Apple, Tesla, and Nvidia, which depend on protected domestic markets and on state-backed monopolies. Closing U.S. bases in Japan, South Korea, and the Philippines would collapse the architecture of Pacific deterrence that sustains the military budget. No serious American faction proposes such moves. Independent military analysts such as Colonel Lawrence Wilkerson have pointed out that the U.S. military’s forward deployments are less about external defence than about sustaining internal contracts and political patronage. The same logic applies to the technology war: it is an industrial-policy subsidy disguised as national security.
China, for its part, has no incentive to formalise a G-2. Xi’s government repeats that global governance should be multipolar, inclusive, and based on sovereignty. In numerous policy papers Beijing has stated that it “has no interest in ruling the world with the U.S.” The Busan encounter reaffirmed that stance. Chinese diplomacy regards the United States as one actor among several, not as a co-ruler of the system.
From a strategic-historical standpoint, the episode resembles the transient alignments of the early twentieth century, when declining empires sought temporary truces to buy time. Independent historians such as Alfred McCoy and John Mearsheimer have drawn parallels between contemporary U.S. overreach and the late British Empire’s efforts to maintain dominance through debt, alliances, and coercive trade. The same structural symptoms, military overstretch, financial fragility, and internal inequality, mark the American position today.
Trump’s behaviour in Busan confirmed this pattern. He sought to convert structural weakness into tactical theatre. His self-assessment that the meeting was “a twelve on a scale of ten” was pure domestic messaging. The contrast between that rhetoric and the factual outcome was so stark that even establishment outlets such as Bloomberg described the truce as one in which “the U.S. made more concessions than China.” Independent economists like Eswar Prasad reached the same conclusion: Washington “won nothing” and merely undid damage of its own making.
The domestic consequences of that miscalculation are already visible. Manufacturing contraction and farm distress have eroded the economic base of Trump’s populism. The administration’s response, further subsidies to farmers and new tariff threats against allies, deepens the fiscal imbalance. Independent budget analysts from the Institute for Policy Studies have shown that over ninety per cent of tariff revenue collected during Trump’s first term was redistributed to affected constituencies, effectively cancelling the fiscal gain. The second administration is repeating the same cycle.
From Beijing’s viewpoint, this repetition confirms the wisdom of strategic patience. Chinese policy documents refer to the “objective situation,” meaning the structural advantage conferred by industrial dominance and domestic market scale. That advantage allows Beijing to absorb short-term shocks and to treat U.S. hostility as background noise. The confidence visible in Xi’s public statements, the calm reference to long-term navigation and mutual prosperity, rests on this material base.
The wider Asian context amplifies it. East Asia’s regional economic architecture, through ASEAN + 3 and the Regional Comprehensive Economic Partnership, now functions independently of U.S. control. The renewal of those mechanisms during the week of the Busan meeting underlines how marginal Washington has become in regional trade governance. Even Japan and South Korea, nominal U.S. allies, are economically integrated with China to an extent that makes full decoupling impossible. Independent Japanese analysts such as Kazuhiro Maeshima have noted that “the American discourse of containment ignores the reality of Asian production networks.”
The Busan truce therefore represents not a G-2 consolidation but a stage in the long decline of unilateral American influence. For the Global South it confirms that the balance of power has shifted irreversibly. For the United States it is a breathing space before the next phase of adjustment. The symbolic language of partnership cannot disguise the underlying competition.
The idea of a true G-2 would require the United States to abandon its ideology of exceptionalism and to accept parity with a non-Western power. That is politically impossible in Washington. It would also require dismantling the network of sanctions, export controls, and military encirclement that define U.S. global posture. Such dismantling would threaten the economic interests of dominant corporate sectors and the psychological structure of American nationalism. Independent analysts such as Andrew Bacevich and Chalmers Johnson have long argued that the United States is trapped in an imperial feedback loop: external militarisation sustains internal identity. Busan did nothing to alter that.
The Chinese leadership understands this dynamic and treats American overtures accordingly. Its refusal to discuss semiconductors or Taiwan during the meeting indicates that it does not consider Trump a reliable negotiating partner. Escobar’s final observation, that “no provocation or escalation” occurred “at least for now”, captures the cautious equilibrium. Beijing avoids unnecessary conflict while preparing for autonomy.
In strategic terms, the truce buys Washington a year to reassess supply-chain vulnerabilities, particularly in rare earths and mid-range chips. It will not reverse the underlying trend. Analysts from the RAND Corporation, traditionally aligned with U.S. defence interests, now concede that “aggressive policies toward China have not achieved their objectives and require recalibration.” That admission, echoed by other establishment figures, marks the slow recognition of defeat in the first phase of the economic war.
From the perspective of independent geopolitical analysis, the episode illustrates the decline of coercive economic statecraft as an instrument of Western power. The combination of sanctions, tariffs, and technology restrictions has failed to break China’s developmental trajectory. Instead, it has consolidated a bloc of non-Western economies determined to trade and innovate outside U.S. control. The attempt to contain China has accelerated the very multipolarity it sought to prevent.
While Trump seeks temporary accommodation with Beijing, China is advancing a parallel trajectory with Moscow that is both deeper and more predictable. Within days of the Busan meeting, the Chinese foreign ministry announced the visit of Russian Prime Minister Mikhail Mishustin to Beijing for the regular session between the two governments. The statement by spokesman Guo Jiakun emphasised “mutual trust” and “new impetus” for the “comprehensive strategic partnership of coordination for the new era.” That formula, repeatedly used since 2019, reflects a level of institutional and ideological convergence absent from Sino-American dealings. The two governments maintain annual inter-ministerial frameworks, linked industrial and energy projects, and shared investment mechanisms insulated from Western finance. Russia’s First Deputy Prime Minister Denis Manturov, co-chairing the intergovernmental commission on investment cooperation, detailed twenty-seven joint projects across eighteen Russian regions, from viscose fibre production in Irkutsk to medical technology in Moscow and a new container line through the Northern Sea Route. These are structural undertakings tied to long-term resource and logistics integration. They stand in sharp contrast to the transactional bargaining that defines U.S.–China exchanges.
Beijing understands that Trump’s foreign policy is erratic, driven by personal impulse and electoral calculation. Moscow, by contrast, offers continuity and shared purpose in resisting Western pressure. The Sino-Russian partnership is built on strategic necessity and historical complementarity, not on temporary tactical bargains. Both sides view cooperation as a shield against economic coercion and as a platform for multipolar development. The regular rhythm of their meetings, the integration of industrial policy, and the use of local currencies in trade all signal a relationship on a different trajectory from that between Beijing and Washington. Trump’s post-summit declaration that his “G-2 meeting with President Xi will lead to everlasting peace and success” underscores the delusion that the United States can draw China away from Russia. Beijing’s diplomatic schedule alone, hosting Russia’s prime minister days after Busan, demonstrates how misplaced that belief is.
In conclusion, the Busan G-2 meeting was an act of damage control by a declining hegemon confronted by a confident rival. It produced a temporary easing of pressures that Trump could advertise domestically, but it changed nothing fundamental. China emerged stronger, the United States more dependent, and the rest of the world more aware of the shift in balance. The talk of a G-2 is illusory. The United States will not abandon its containment posture; its political and economic system is built upon it. China will not accept co-management of a global order that it views as unjust and unstable. The meeting’s symbolism lies in its modesty: a superpower asking for time, and a rising power granting it without cost.
The real movement in world politics is elsewhere, in the consolidation of Eurasian and Global South alliances, the spread of alternative financial mechanisms, and the slow erosion of Western monopoly over technology and narrative. The truce in Busan is a pause before the next phase of that transformation. When history assesses this moment, it will see not the birth of a G-2, but the quiet confirmation that the American century has ended and that a new, plural order has taken its place.
Authored By: Global Geopolitics
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