'Optics of Busan meeting show neither Trump nor Xi wants escalation'

In the latest episode of The Federal's YouTube program Worldly Wise, Consulting Editor KS Dakshina Murthy speaks about the significance of the recent Donald Trump–Xi Jinping meeting in Busan, South Korea. The discussion explores why this rare in-person summit was held now, the geopolitical messages it sent, and how it could reshape trade, security, and the global power balance.

Edited excerpts:

The Trump–Xi meeting took place in Busan, South Korea — an unusual choice for a US–China summit. What message does this send to regional players like Japan, Taiwan, and North Korea?

The choice of Busan is quite symbolic. Both Donald Trump and Xi Jinping wanted to meet at the earliest opportunity because tensions between their countries were rising. There were also several pressing economic issues — from trade restrictions to supply concerns — that both sides needed to address immediately.

South Korea, strategically located in the Pacific theatre, served as neutral yet significant ground. For Trump, it was his first long overseas trip since returning to the White House for a second term. For Xi, the region remains central to China’s geopolitical interests.

Busan thus became an ideal venue to discuss critical issues like the suspension of US soybean exports to China, which had hurt American farmers, and China’s curbs on rare earth exports to the US, which are vital for high-tech manufacturing. At the same time, US restrictions on technology exports were hurting Chinese companies. These intertwined dependencies and rising tariffs made dialogue unavoidable.

Trump announced a 10% tariff cut on Chinese imports and called the meeting “amazing.” Do you see this as a genuine reset in US–China trade relations or a tactical move to calm markets?

Trump is known for his hyperbolic style. His description of an “amazing” meeting needs to be read with caution. The 10% tariff cut is modest — Chinese negotiators reportedly expected at least a 30% reduction.

However, there were some tangible steps. The US agreed to cut tariffs on precursor chemicals for fentanyl, while China offered to resume purchases of American soybeans and rare earth exports. Trump’s move signals that he wants to lower tensions and demonstrate that he means business, especially with the 2026 midterms approaching.

Unlike Washington’s dynamic with New Delhi — where Trump has been more coercive on trade and oil imports — the US–China relationship is marked by mutual leverage. Both sides give something.

Xi, on the other hand, was more measured. He acknowledged the differences between the two countries — in mindset, history, and worldview — but said both must work through them pragmatically. His response was positive, paving the way for future visits: Trump plans to go to China next April, followed by Xi’s return visit to the U.S. The meeting, therefore, has opened a path for continued dialogue, even if it isn’t the “amazing” breakthrough Trump claims.

Analysts say the deal lacks enforcement details and could unravel under domestic pressure in both countries. How sustainable is this arrangement? Is it more symbolic than structural?

It’s a starting point, but with concrete moves. Tariffs have been lowered from 57% to 47%, which is significant — lower even than the 50% tariffs India currently faces on U.S. exports.

The US and China recognise their mutual dependence. Unlike Washington’s dynamic with New Delhi — where Trump has been more coercive on trade and oil imports — the US–China relationship is marked by mutual leverage. Both sides gave something: China reopened rare earth exports, Trump eased restrictions on fentanyl-related imports, and Beijing resumed soybean purchases.

This pattern of give-and-take shows a more equitable dynamic between the two superpowers, a sharp contrast to the US’s one-sided approach toward India. It also reflects each nation’s global standing.

Beyond trade, both leaders mentioned global security and supply chain resilience. Could this be the start of a broader US–China thaw, or just a temporary pause in a long-term rivalry?

The rivalry will continue — it’s structural. Both nations are global competitors. The real question is whether they can manage their rivalry peacefully, and this meeting suggests they might try.

In the Asia-Pacific, tensions persist between China and countries like Japan, the Philippines, and Taiwan. The US remains a key player through allies such as South Korea and Japan. Meanwhile, China continues to expand its influence across the region.

China has so far supported Russia discreetly — offering diplomatic cover, technical support, and possibly even spare parts for military equipment. Yet, Trump hasn’t demanded that Beijing stop importing Russian oil.

The optics of this meeting show that neither Trump nor Xi wants escalation. Both appear to be seeking ways to reduce tension. For instance, South Korea’s request for Trump to meet North Korea’s Kim Jong Un reflects a wider regional push for dialogue. Overall, it’s a positive sign that could have a stabilizing ripple effect in East Asia.

Will this meeting have any impact on the Russia–Ukraine war?

It likely will, though details are still emerging. Trump confirmed that the Ukraine conflict was discussed at length. Given China’s support for Russia and Washington’s backing of Ukraine, any change in tone between Beijing and Washington could influence the war’s trajectory.

China has so far supported Russia discreetly — offering diplomatic cover, technical support, and possibly even spare parts for military equipment. Yet, Trump hasn’t demanded that Beijing stop importing Russian oil, even though China is now the largest buyer, followed by India.

That’s an interesting contrast. Trump has pressured India to stop oil imports from Russia, but hasn’t applied the same standard to China. This suggests a different yardstick in his foreign policy calculus. If Washington and Beijing were to align, even partially, on the need to end the war, it could meaningfully accelerate peace efforts.

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