If world diplomacy were a giant dance room, the US President Donald Trump’s trade-tariff choreography in South Korea looked like a wild night out, as he hugged China’s President Xi Jinping, evinced an interest to twirl with India’s Prime Minister Narendra Modi, and did a few hoops and turns for the media’s entertainment. Trump’s public flourish that he wants to do a trade deal with India came amid a high-profile meeting with Xi, which was a tryst that resulted in temporary tariff tweaks, half-baked promises, and head-turning one-liners for the stock markets and policymakers.
For India, there was a bit of good news, as America, after imposing 50 per cent tariffs, and squeezing the former’s hands for buying Russian oil, hinted that it wishes to soften its stand. This was Trump’s earnest statement that hinted at the continuation of the bilateral trade negotiations. “I’m doing a trade deal with India, and I have great respect and love… as you know… for Modi… we have a great relationship,” stated Trump in South Korea’s Gyeongju, during the last leg of a three-nation tour that included Malaysia and Japan.
The US president has repeatedly expressed his intent at stopping wars across the world. During his Asia tour, he appeared intent at calling a truce to the trade-tariff wars with both China and India, and especially China, for which critics hold him responsible. As in his efforts to end armed conflicts, where he was partially successful, he may have opened a breathing space for a truce between the two nations, if not eliminating uncertainties over the relations.
Move over Sun Tzu. The time to practice the ‘Art of War’ seems to be over, at least for Trump. It is time for America to opt for the ‘Art of Peace.’ This was reflected in the talks with Xi, which indicated that Trump has at last acknowledged China as a superpower, and both leaders were negotiating largely as equals. As Trump shared exciting snippets from his meeting with Xi with accompanying journalists on the way home aboard Air Force One, China's Ministry of Commerce shared the outcomes reached during the negotiation.
CNN reported that the US president indicated that the two sides came to an agreement on “almost everything,” where overall tariffs on Chinese goods dropped 10 per cent to 47 per cent, a minor dip some may say, due to progress on American soybeans, Chinese rare earths, and the contentious fentanyl issues during the talks. China agreed to suspend its recently introduced licensing measures for rare earth exports to countries for at least a year.
Reports speculated that rare earths would be a major leverage for Beijing in trade negotiations with Washington, as China accounts for around 70 per cent of the world’s supply of these critical minerals. Beijing, the biggest buyer of American soybeans before it stopped imports following the tariff war, agreed to resume the purchases. Imagine a kind of barter between farm produce, like soybeans, for critical and highly valued minerals like rare earth. History notes that imperialist nations did the opposite: they exchanged premium finished products for raw materials that they purchased from the colonies.
But that was in the past, or so Trump will contend. In the present world order, soybeans are a vital component of the Chinese economy and cuisine in China. It is primarily used for food products, animal feed, and industrial applications. As Beijing ignored American soybean farmers, the latter lost billions of dollars as oversupply drove down farm-gate prices, and crops sat on the fields. Farmers need to sell their produce in the markets and cannot depend on subsidies. For them, a deal that commits to purchase 25 million tons of soybeans annually sounds like the harvester’s engine music.
Beijing’s grip on rare earths comes not only from producing a bulk of the global production, but from processing nearly 90 per cent of the world’s rare earth elements. China’s lower production costs and advanced refining capabilities contribute to this dominance, leaving the US, Europe, India, and other nations vulnerable. Rare earth elements are used in smartphones, digital cameras, hard disks, flat screen TVs, computer monitors, among other hi-tech devices. Some are also used in clean energy and defense technologies.
While Trump went overboard about the US-China deal, although it is only for a year and will be reviewed and sharpened when the two leaders meet again in April 2026, the reactions in China's state-controlled newspaper followed the optimism but in a guarded manner. “China and the United States should be partners and friends. That is what history has taught us and what reality needs. Given different national conditions, it is normal for the two countries to have friction. What matters most is how to view and handle them properly. Both sides should focus on the bigger picture and the long-term benefits of cooperation,” it opined.
What the slightly twisting, almost-convoluting statement or analysis means is that the trade-tariff woods may be dark and deep, but it will be lovely if the two adversaries walked the miles together. The US media was cautious despite Trump’s exaggerated reactions. “It is not yet clear whether the deal is a comprehensive agreement, but its news comes as a relief to businesses, consumers, and investors after the world’s two biggest economies ramped up levies and export controls in recent weeks. The deal scraps Trump’s threat of a 100 per cent tariff increase, immediately reduces the total tariff rate on Chinese goods, and resolves, at least for now, several of the more contentious trade issues between the US and China,” reported the Time magazine soon after the meeting in South Korea.
The most direct short-term effect was a measurable softening in the tariff rhetoric and at least a tentative rollback of some of the US’ measures on Chinese goods, which traders and manufacturers welcomed as a de-escalation of what looked like a widening economic skirmish. The reliefs, however, come with a twist: When Washington and Beijing find ways to reduce friction between them, global supply chains that have been diversifying away from China may pause or even reverse course, at least partially, because the economic penalty for staying with established suppliers looks smaller.
The White House and the US administration now look forward to the events over the next few months, and the scheduled meeting between the two leaders in Beijing in April next year. Trump believes that the Chinese “feel very strongly” about increasing investments in the US. In fact, according to this narrative, the Chinese congratulated him on attracting huge sums of foreign investments from other nations, using trade and tariffs as effective levers. Although Beijing wants inroads into America in terms of investments, unlike in other cases, it did commit even a billion dollars. Trump’s heart yearns for more.
(The author has more than three decades of experience across print, TV, and digital media)
