When U.S. President Donald Trump and Chinese President Xi Jinping met in South Korea, the global spotlight turned to whether the world’s two largest economies could finally de-escalate their widening trade and technology confrontation or whether the summit would turn out to be another round of strategic signaling between Washington and Beijing.
The high-stakes encounter in the port city of Busan, scheduled for Thursday, will be the first face-to-face meeting between the two leaders since 2019. Their agenda is dense, stretching from trade tariffs and rare-earth exports to AI technology, fentanyl trafficking, and geopolitical tensions involving Ukraine and Taiwan.
But while both sides speak of “problem-solving,” analysts say the underlying rivalry is now structural, driven not just by economics but by competing visions of power, technology, and world order.
A Relationship Defined by Tariffs and Technology
Relations between the U.S. and China have been on a steady downward trajectory for several years. Since returning to the White House in January 2025, President Trump has reintroduced a confrontational trade posture, reviving the tariff war that began in his first term.
Earlier this year, Washington and Beijing exchanged tariffs exceeding 100 percent on each other’s goods. The U.S. justified these moves as countermeasures against Chinese “unfair trade practices” and its alleged inaction on drug trafficking, particularly fentanyl exports.
Beijing retaliated with its own set of heavy tariffs, while simultaneously imposing export restrictions on a set of 12 critical rare-earth metals. These are the elements vital for defense production, electric vehicles, and AI systems.
In parallel, Washington moved to restrict semiconductor exports to China, citing national security concerns and the risk of technological transfer that could “empower military AI.” Beijing viewed these steps as an attempt at technological containment, further eroding trust between the two powers.
Why This Meeting Matters
The Busan summit follows months of back-channel trade talks and several failed attempts at de-escalation. In recent weeks, both sides have signaled cautious optimism, but expectations remain modest.
Trump told reporters aboard Air Force One that he anticipates a “great meeting” that could “solve a lot of problems.” At the same time, China’s Foreign Ministry confirmed that Xi and Trump would “exchange views on bilateral relations and issues of mutual concern.”
Analysts, however, warn that any progress will likely be limited to short-term arrangements, as both sides are now deeply entrenched in a long-term strategic competition that spans economic, technological, and geopolitical domains.
Key Issues on the Table
1. Trade Tariffs and Economic Statecraft
Trade tariffs remain at the center of the confrontation. The U.S. currently maintains elevated tariffs on a wide range of Chinese goods, while China has responded with restrictions on American agricultural exports such as soybeans. Although both sides agreed to temporary truce extensions during talks in August, a comprehensive trade deal has yet to materialize.
Experts describe these tariffs as a form of economic statecraft, the use of economic tools as instruments of power. Washington’s tariffs are designed not only to protect domestic industries but to pressure China into policy concessions, while Beijing’s countermeasures aim to demonstrate economic resilience and strategic endurance.
2. The Fentanyl Crisis and Security Diplomacy
A central issue for Washington is fentanyl trafficking, a synthetic opioid that has caused tens of thousands of deaths across the U.S. each year. Trump has repeatedly accused Beijing of failing to regulate the export of precursor chemicals used to produce fentanyl.
In February, Trump imposed a 20 percent tariff on all Chinese imports, directly linking it to fentanyl concerns. Reports suggest that China may now agree to tighten export controls on these chemicals as part of a negotiated compromise. For Beijing, cooperation on this issue offers a low-cost diplomatic gesture, helping reduce pressure without altering its broader strategic position.
3. Rare-Earth Metals and Resource Leverage
China’s decision to restrict exports of 12 critical rare-earth metals, including neodymium and dysprosium, has further strained ties. These minerals are essential to industries like defense manufacturing and renewable energy. Beijing justified the restrictions on “national security grounds,” but the move is widely seen as a strategic countermeasure to U.S. export controls on semiconductors.
Washington, in turn, has sought to diversify supply chains by signing new trade agreements with Japan, Malaysia, and Cambodia, aimed at reducing dependency on Chinese rare-earth exports. This reflects a broader U.S. strategy of supply-chain decoupling.
Analysts note that while these moves may weaken China’s near-term leverage, they also encourage Beijing to accelerate its domestic innovation and regional outreach, strengthening its long-term autonomy.
4. Technology, AI, and TikTok
Another flashpoint is technological sovereignty. The U.S. has expanded restrictions on Chinese tech companies, blacklisting hundreds of firms linked to AI and advanced computing. In September, Trump ordered that TikTok’s U.S. assets be transferred to American investors, citing “national security risks.” U.S. officials now claim the deal has been finalized and will be officially signed during the Trump–Xi meeting.
While the TikTok resolution may serve as a symbolic win for Trump, experts argue that it will not end the broader tech rivalry between the two nations. Washington continues to limit Chinese access to advanced semiconductor technologies, while Beijing retaliates through antitrust investigations against American chipmakers and stricter export rules on rare-earth elements. The battle over AI and data reflects a deeper contest for technological dominance, one that could define the next phase of global power politics.
5. Geopolitical Tensions: Ukraine and Taiwan
Beyond economics, both leaders are expected to discuss geopolitical flashpoints, particularly the wars in Ukraine and the future of Taiwan. Trump reportedly hopes to enlist China’s support in pressuring Moscow toward a ceasefire in Ukraine. Beijing, however, maintains that the conflict “serves no one’s interest” but has been reluctant to undermine its strategic partnership with Russia.
According to Western intelligence assessments, China views a stable Russia as essential for maintaining strategic depth against U.S. pressure. As one analyst noted, “Beijing wants peace in Ukraine but not at the expense of Russia’s collapse.”
The Taiwan issue remains even more sensitive. Xi is expected to reiterate opposition to what China calls “pro-independence moves” by Taiwan’s leadership. Washington, meanwhile, continues to supply Taipei with defensive arms, maintaining its commitment to deterrence through ambiguity. Although Trump hinted, he might not raise the Taiwan issue, analysts believe it will remain an underlying friction point shaping U.S.–China strategic calculations for years to come.
Who Holds the Upper Hand?
Determining who holds the advantage in the U.S.–China rivalry is complex. The United States has effectively built a network of economic alliances with Japan, Malaysia, Cambodia, and now South Korea that extends its strategic influence across the Indo-Pacific. These deals integrate trade and security, requiring partners to comply with U.S. export restrictions and supply-chain rules.
China, in contrast, retains economic endurance. It still anchors the world’s manufacturing base, controls much of the global rare-earth supply, and has proven its ability to absorb economic shocks. Moreover, Beijing’s recent free trade agreement with ASEAN has strengthened its regional footprint, offering new markets amid Western restrictions.
As analysts put it, the U.S. may have the louder hand, but China holds the steadier one. Washington can escalate through alliances and sanctions; Beijing can outlast through resilience and industrial depth.
The Bigger Picture
The Trump–Xi 2025 meeting underscores a shifting global reality that economic interdependence no longer guarantees peace. Instead, it has become a new battlefield where trade, technology, and data serve as tools of power projection. From tariffs and TikTok to rare earths and AI, every agenda item in Busan reflects a deeper struggle. This is a transition from globalization to geoeconomic warfare.
