Political commentator Einar Tangen described the tariff reduction as “meaningless,” arguing that any duty above 25% effectively halts trade. He said Beijing is playing for time, using a “slow-play strategy” to manage Trump’s unpredictability while keeping its long-term goals steady. According to him, China has the US “over a barrel” on rare earth supply and is unlikely to freely export materials that could strengthen America’s military advantage.
Former Ambassador Meera Shankar said the Busan understanding was a limited one, with both sides still far from a comprehensive trade deal. She added that China’s messaging—highlighting economic resilience and global responsibility—was intended to project itself as an equal partner to the US rather than a rival. However, she cautioned that the underlying strategic and economic contest between the two remains unresolved.Trade expert Abhijit Das noted that Trump’s claims should be treated cautiously until both sides sign a written agreement. He called the meeting a “temporary truce” and said the annual review of the new economic understanding only underscores how fragile the US-China relationship remains. Das added that the real battle lies in advanced technologies like artificial intelligence and semiconductors, where both nations are racing for dominance.
Overall, all three experts agree that the meeting may have helped stabilise relations in the short term, but the deeper contest for economic and technological supremacy continues to define the world’s most consequential bilateral relationship.
Below is the excerpt of the discussion.
Q: The effective tariff reduction by the US is 10%. Is this good enough for China? President Trump has called this a great deal, saying on a scale of one to ten, this deal is a twelve. Do you think China shares this sentiment?
Tangen: Of course not. China is simply playing for time, as we’ve discussed before. It’s a slow-play strategy. They have to deal with Donald Trump for the next three years and a few months. When you conclude a deal with him, he often slaps you right after. India knows this well. If Trump needs you, he’s very nice, but if he doesn’t, he uses you like an old rag.
So, in terms of the tariff itself, it’s meaningless. Any tariff above 25% effectively closes off trade, and this is almost double that. This is just Donald Trump trying to put lipstick on a pig. China, on the other hand, went to great lengths to appear friendly. Xi Jinping was very gracious and said nice things about Trump, but that’s part of a larger plan to keep him engaged while maintaining control.
Q: Professor Das, the Chinese Foreign Ministry’s statement doesn’t mention assurances on soybean purchases or the deferment of rare earth export controls. Do you think we are yet to see the extent to which China will deliver on the promises Trump has made?
Das: As we all know, President Trump’s statements can change by the day, if not within the same day. Until we see something in writing agreed upon by both the United States and China, it’s hard to say definitively what concessions have been made.
Understandably, in the absence of a mutually agreed written document, China is cautious and has merely said that the two sides reached a consensus to resolve major trade issues. That might more accurately reflect what transpired. Some progress has been made, but the finer details are yet to be resolved. Until that’s done, we should keep our fingers crossed and hope the positive momentum continues.Q: Ambassador Shankar, China’s Foreign Ministry said President Xi emphasised that China’s economy remains strong and resilient, with 5.2% growth so far this year. Was this a message from Xi Jinping to President Trump that China has more leverage?
Shankar: Certainly, it was a message that China’s economy is strong enough to handle whatever the US throws at it. From what has emerged, Trump called it an “outstanding meeting,” rating it twelve out of ten, while Xi was more cautious, saying the two sides reached a consensus to resolve trade issues.
He also said they should meet again to refine, finalise, and implement any agreements. It seems that the current understanding is a limited one, under which the US will not impose the 100% tariffs it had threatened from November 1, and China will remove restrictions on rare earth exports.
Trump claimed that this would be global and that the US would reduce tariffs by 10% on fentanyl-related imports. Altogether, US tariffs on China now stand at 47%, while Chinese tariffs on the US stand at around 37%.
The larger trade deal is still to be negotiated. China continues to emphasise that both the US and China, as the two largest economies, should responsibly share the global burden. Essentially, China wants to project itself as an equal partner of the US in managing global affairs. Whether this leads to a durable settlement remains to be seen.
Q: On the issue of rare earth magnets, do you think China will freely export them to the US now that restrictions have been paused?
Tangen: I don’t think so. We shouldn’t put too much faith in whatever Donald Trump says. China has the US over a barrel. Rare earth elements are critical for the supply chain — for automobiles, defence, and technology. China controls about 98% of the heavy magnets production process.
These are essential for motors, gyroscopes, aircraft, and missiles. So, I doubt China will freely give the US materials to build missiles that threaten it.
Also, I must correct something: China is not exporting fentanyl. What it exports are precursor chemicals like piperidine, which have many industrial applications. The US is trying to portray China as a drug dealer when, in fact, it is simply exporting chemicals that can be used in many ways.
Q: Professor Das, President Trump said the new economic understanding will be reviewed annually. Does this show room for complexity and misunderstandings?
Das: Very much so. But the bigger issue is the competition in advanced technology, especially artificial intelligence. Trump mentioned that China would now be able to talk to Nvidia for advanced AI chips. That’s a major concession by the US, possibly part of a quid pro quo for China easing rare earth restrictions.
Overall, this is likely a temporary truce that could fall apart anytime. The annual review provides a structure to manage disputes that may arise, but at its core, this remains a race for technological dominance.
Watch accompanying video for entire discussion.
