The Busan summit brought a temporary lull.

Reduce tension escalation.

The first face-to-face meeting in six years between the leaders of the world's two largest economies lasted approximately 100 minutes, ending sooner than expected. The immediate result was a clear signal of de-escalation of tensions, which had been heightened by retaliatory tariffs and disputes over rare earth minerals. President Trump announced he would visit China in April 2026. For his part, President Xi Jinping called it a step toward "important consensus." While there was no joint statement, both sides avoided making any statements that could be perceived as weak. According to observers, the brevity of the meeting suggests that preparations for key issues had been completed beforehand. It is likely that a "very significant framework agreement" was formed at the October 25 meeting in Kuala Lumpur, Malaysia, between US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng.

The agreement reached in Busan was a series of clear "reciprocal" commitments, focused on easing the most pressing economic hotspots. On the Chinese side, the commitments were very specific. Beijing pledged to do more to stop the flow of precursor chemicals used to produce fentanyl, a deadly synthetic opioid and a top priority for the Trump administration in addressing the public health crisis. In addition, China agreed to postpone the implementation of export restrictions on key minerals, including rare earth elements, to the US for one year, removing an economic leverage point that Beijing had been using. Another key commitment was the resumption of US soybean purchases. This was a major victory for Trump, as China's previous import cuts had severely damaged his rural constituency. According to US Treasury Secretary Scott Bessent, China has committed to purchasing 12 million tons of soybeans between now and January 2026, and 25 million tons annually for the next three years. Finally, the Chinese Ministry of Commerce stated it would cooperate with the US to "properly resolve issues related to TikTok," hinting that an agreement regarding ownership of the app in the US may be imminent.

In return, the US also made significant concessions. The biggest concession was a reduction in tariffs, with President Trump agreeing to a 10 percentage point reduction in tariffs on Chinese goods, bringing the effective average tariff down from 57% to 47%. Specifically, the 20% tariff related to fentanyl was halved to 10%. Additionally, the US will suspend its Section 301 investigation into China's maritime and shipbuilding activities, easing legal pressure on this key industry in Beijing. Another notable move is that Washington will temporarily suspend for one year the new restrictions on the "Entity List," which made it difficult for Chinese companies to use subsidiaries to purchase banned US technology.

Beyond the main commitments, the two sides also agreed to temporarily suspend tit-for-tat port charges. Trump also posted on the social media platform Truth Social that China had agreed to buy oil and gas from Alaska, although official sources later indicated that Xi Jinping had only "expressed interest" in participating in a new LNG pipeline there. The silence on several other strategic issues reinforced the view that the Busan meeting focused primarily on managing the short-term economic crisis, rather than addressing fundamental geopolitical disagreements.

A "one-year" lull?

Immediately after the details were released, the reaction from global financial markets was rather subdued. This suggests that investors had anticipated a limited agreement and did not believe it would fundamentally alter the trajectory of US-China relations. Analysts were quick to point out the "transactional" nature of the deal. According to Reuters, Craig Singleton, a senior China expert at the Foundation for Defense of Democracies (FDD), stated: "The tariff cuts in exchange for a promise to crack down on fentanyl provide temporary calm, but it's a transactional relief, not a structural reset." Singleton added, "Nothing fundamentally changes, and the cycle of coercion will continue as long as one side feels disadvantaged."

Meanwhile, a CNN article noted that the current agreement in Busan is essentially just a "rough draft" and nothing has been officially signed. Washington's fundamental position remains that China is a threat to its global dominance. Conversely, Beijing remains dissatisfied with the US's tariff and containment strategies. Both sides seem to agree on only one point: they cannot afford a full-blown confrontation, whether on trade or anything else, at this time.

Further analysis from economic experts suggests that, even if fully implemented, the Busan agreement is unlikely to address the underlying economic problems facing both countries. For the US, the agreement to resume soybean purchases is considered "too little, too late." The peak harvest season in the US has already begun, and many farmers may have already sold their surplus at lower prices. Therefore, the positive impact on the agricultural voter base may not be as significant as Trump hopes. More importantly, the US labor market is clearly weakening. Recent data shows a significant slowdown in hiring. Trump's unpredictable tariff policies have increased uncertainty, making businesses hesitant to hire. Now, US companies are even beginning to lay off workers. For the first time in years, the number of unemployed exceeds the number of available jobs. Advances in Artificial Intelligence (AI) are also contributing to this wave of layoffs. Federal Reserve officials warn that if AI creates a structural shift in labor demand, monetary policy (such as interest rate cuts) will no longer be an effective tool. For China, the impact of a 10% tariff reduction is seen as negligible compared to domestic issues. Louise Loo, Head of Asian Economics at Oxford Economics, estimates that the deal will "at most add only 0.2% to China's growth forecast for next year."

Ultimately, the "friendly atmosphere" in Busan could not mask the fact that this was only a temporary "ceasefire." The moves leading up to the summit, such as Trump giving the Pentagon the green light to resume nuclear tests, clearly demonstrated this. Strategic competition and deep distrust between the US and China remain the main theme.

The Trump-Xi meeting in Busan succeeded in achieving its minimum objective: preventing a full-blown trade war. It provided a one-year lull for the world's two largest economies to focus on addressing pressing internal issues. Both Washington and Beijing bought time, but the clock is still ticking for unresolved structural disagreements.