Trump–Xi Meeting in Busan: Signs of a Thaw in U.S.–China Trade Tensions

In Busan, the face-to-face meeting between Donald Trump and Xi Jinping marked a significant step toward stabilizing U.S.–China trade relations, offering a positive signal for global economic recovery.

1. A Long-Awaited Encounter After Six Years of Strain

On October 30, 2025, at an airbase near Gimhae Airport in Busan, South Korea, U.S. President Donald Trump and Chinese President Xi Jinping held their first direct meeting since 2019.
The encounter took place on the sidelines of the 2025 APEC Summit, as part of Trump’s Asian tour aimed at defusing the prolonged U.S.–China trade tensions.

This was not merely a symbolic handshake. Many observers saw it as a potential turning point for restoring stability to the global economy after years of disruption.
When greeting Xi, Trump said confidently: “We’re going to have a very successful meeting — no doubt about it.”
President Xi responded in kind: “The two largest economies will not always agree, and that’s natural. What matters is continuing to work together to lay a solid foundation for China–U.S. relations.”

2. A Framework Agreement – Modest but Meaningful

According to the U.S. Treasury Department, the two sides reached a “basic framework agreement” in preliminary negotiations ahead of the summit.
China agreed to suspend plans to enforce export restrictions on rare earth materials, while the United States agreed to hold off on imposing the threatened 100% tariffs on Chinese goods — a move that could have severely harmed both economies.

While limited in scope, this step signaled a temporary truce and mutual goodwill after years of escalating trade hostilities.

U.S. Treasury Secretary Scott Bessent commented:

“Pausing tariffs and export restrictions is the right move. Both sides understand that another trade war would leave no winners — only uncertainty.”

3. Core Topics on the Busan Table

The Trump–Xi dialogue went far beyond tariff disputes, touching on four key areas that shape the global economic landscape.

a. Tariffs and Export Controls

The U.S. had threatened to impose 100% tariffs on Chinese imports if progress was not made, while China’s earlier plan to restrict rare earth exports — vital for high-tech industries — had raised alarm in the West.
At Busan, both nations agreed to suspend these escalation measures, preventing a new “tariff war” from erupting.

b. Agriculture and Mutual Economic Relief

In a welcome development for rural America, China pledged to resume soybean imports from the U.S., signaling goodwill and offering relief to American farmers who had suffered from previous trade conflicts.

c. Rare Earths and Global Supply Chains

Rare earth elements are essential for semiconductors, electric vehicles, and renewable energy.
Beijing’s temporary suspension of export curbs helped stabilize the global technology supply chain, easing pressure on manufacturing hubs in Vietnam, South Korea, and Malaysia.

d. Market Reactions and Investor Sentiment

Following the summit, Asian stock markets rose, and the Chinese yuan strengthened to its highest level in nearly a year.
Investors appeared cautiously optimistic that the world’s two largest economies might be steering away from confrontation — though they remained on alert for any setbacks.

4. Positive Signals, but Uncertainty Persists

Experts widely agree that the Busan meeting was symbolically powerful but not yet a strategic breakthrough.
Three key concerns remain on the horizon:

Lack of concrete details: The framework agreement, while encouraging, lacks timelines and enforcement specifics, leaving open the risk of delays or reversals.

Geopolitical risks remain high: Issues like Taiwan, regional security, and advanced technology continue to pose potential flashpoints that could reignite tensions.

Market optimism may be premature: The current “relief rally” in equities might prove short-lived if concrete policy follow-through does not materialize in the coming quarters.

As former U.S. trade negotiator Wendy Cutler observed:

“The meeting is a positive reset, but real change will depend on sustained commitment and credible implementation.”

5. Ripple Effects for Vietnam and Southeast Asia

The potential easing of U.S.–China tensions carries significant implications for Southeast Asia — particularly for Vietnam, a key player in regional manufacturing and supply chains.

Supply chain stability: With China suspending rare earth export controls, Vietnam’s electronics and component industries could benefit from more stable input costs and fewer production disruptions.

Reduced agricultural competition: If China resumes large-scale purchases of U.S. soybeans, global agricultural markets could stabilize, allowing Vietnamese exports to find new opportunities.

Smarter FDI flows: As trade tensions ease, multinational companies may reassess their “China +1” strategies, with Vietnam remaining a favored alternative hub thanks to its political stability and competitive environment.

However, a prolonged U.S.–China détente could also mean China’s exports reaccelerate, intensifying competition across ASEAN markets.
To remain resilient, Vietnam must upgrade its industrial capacity, invest in technology, and strengthen value-added production, turning current advantages into sustainable long-term competitiveness.

6. Conclusion: A First Step Toward a New Dialogue Cycle

The Trump–Xi meeting in Busan marked a historic moment, reopening direct communication channels between the world’s two largest economies.
While it is far from a comprehensive trade deal, the display of goodwill and restraint has brought a sense of relief to global markets and restored hope for more predictable policymaking.

The next test lies in execution and follow-up:

Will both sides translate their commitments into tangible action?

Can they manage technological and security disputes without renewed escalation?

And most importantly — will market confidence endure long enough to transform optimism into reality?

For Asia-Pacific nations, especially Vietnam, this is a strategic window of opportunity.
By enhancing manufacturing capacity, pursuing digital transformation, and deepening regional cooperation, countries in the region can turn Busan’s symbolic handshake into real economic progress.

FAQs

Q1: Why is the Trump–Xi meeting in Busan important for global trade?
A1: The U.S. and China together represent nearly 40% of global GDP. Their trade tensions directly affect supply chains, investment flows, and global market confidence. The Busan meeting signals a chance for renewed stability in these relationships.

Q2: What specific agreements were made?
A2: Both sides agreed to a “basic trade framework” — China would suspend rare earth export restrictions, and the U.S. would delay its planned 100% tariff hike on Chinese goods. However, implementation details remain undisclosed.

Q3: How could Vietnam benefit from this thaw?
A3: Vietnam stands to gain from lower production costs, more stable supply chains, and expanded export opportunities, while potentially attracting more foreign direct investment (FDI) from firms diversifying away from China.

Q4: Does this mean U.S.–China tensions are over?
A4: Not yet. The Busan meeting represents a strategic pause, not a permanent resolution. Key issues in technology, security, and geopolitics remain unresolved, and future negotiations will be crucial in determining long-term outcomes.