How long will Donald Trump and Xi Jinping’s trade war truce last?

Core Agreement: Following a meeting at a South Korean airbase, U.S. President Donald Trump and Chinese President Xi Jinping agreed on the essential elements of a one-year trade truce after months of negotiations.

• Trump characterized the outcome as "amazing," assigning it a score of 12 on a 1-to-10 scale.
• China's Commerce Ministry confirmed the agreement, though it took time to issue an official readout.
• Both leaders agreed to reciprocal visits next year.

Specific Truce Terms (One-Year Postponements):

• Rare Earths & Tariffs: China agreed to delay new export controls on rare earths for one year, triggering a U.S. postponement of threatened 100% tariffs on Chinese goods originally set to take effect November 1.
• Reciprocal Measures: The U.S. will delay reciprocal tariffs due November 10 and new export controls on subsidiaries of blacklisted Chinese firms.
• Shipping & Ports: Both sides postponed existing measures related to confrontations over shipping and ports.
• Fentanyl Tariffs: The U.S. agreed to halve a 20% tariff linked to China's alleged failure to curb fentanyl precursor chemical exports.
  • In exchange, China committed to stepping up efforts to stifle fentanyl trade.
• Agriculture: China resumed purchases of American soybeans, halting a pause that began in May.

Outstanding Issues & Omissions:

• TikTok: While Trump did not explicitly mention TikTok's U.S. operations, the Chinese readout noted both sides would work on the issue.
• 2020 Deal Compliance: U.S. officials confirmed an investigation into whether China violated the January 2020 trade deal will continue.
• Silicon Valley: No clear agreement was reached on Chinese investment in the U.S. or U.S. semiconductor sales to China, despite being discussed.
• Taiwan: The topic of Taiwan was reportedly omitted from discussions by both sides.
• Permanent Deal Status: The current agreement acts as a temporary truce; Trump stated a final deal could be signed soon, but negotiations may need to be renegotiated annually.

Strategic Context & Parallel Actions:

• Supply Chain Diversification: Simultaneously with the China truce, Trump signed agreements with Thailand, Malaysia, and Japan to cooperate on critical mineral supply chains, aiming to reduce reliance on China.
• Defense Alliances: The U.S. agreed to share technology enabling South Korea to build nuclear submarines to bolster defense ties.
• Broader Competition: Analysts note these parallel moves indicate the U.S. is continuing to prepare for economic and military confrontation with China even during the trade pause.

Risks and Future Outlook:

• Structural Unresolved Issues: The truce does not address underlying problems such as China's industrial policy, and a significant 47% tariff on Chinese goods remains in place.
• Historical Volatility: There is a risk the agreement unravels due to past patterns of "false starts," escalations, or misinterpretations between negotiators.
• Unrelated Crises: High military tensions in the South China Sea and around Taiwan, along with Trump's recent order to resume nuclear weapons testing, pose threats to stability.
• Conclusion: While the trade truce reduces immediate flare-up risks, the relationship remains unstable and the agreement is not viewed as a final resolution.