By most accounts, the end result of the 90-minute assembly between U.S. President Donald Trump and Chinese language President Xi Jinping in October was little greater than a one-year truce within the commerce battle, rolling tariffs again to Jan. 19 ranges, although remaining particulars are nonetheless being sorted out; a uncommon Xi-initiated cellphone name to Trump on Nov. 24 underscored his need to implement the deal (whereas additionally elevating the Taiwan difficulty). However what if the Washington cognoscenti and far of the press have it flawed? What if the assembly signaled the start of a brand new section in U.S.-China relations?
Why? One metric I exploit to gauge U.S.-China relations is the 5 phases of grief—historically framed as denial, anger, bargaining, despair, and acceptance. After passing by the primary two, Washington is hitting the third. These have unfolded in direct proportion to China’s emergence on the fashionable world stage, as its GDP grew from $310 billion in 1985 to $18.8 trillion in 2024 and it moved up the ladder of civilian and navy know-how to problem U.S. international primacy.
For too lengthy, the USA was in denial, assuming that China’s financial reforms and opening would result in the political liberalization seen in South Korea and Taiwan—or refusing to imagine that China might ever get its act collectively sufficient to problem the USA. Then, towards the tip of the Obama years and absolutely below Trump, because the “China shock” reverberated, the consensus moved into the second stage: anger. China turned completely poisonous in Washington; the Blob-acceptable debate was how greatest to compete, comprise, and put together for battle.
The Trump-Xi assembly means that the USA is transferring past mere anger towards managing variations, however defining the phrases of competitors stay problematic.
Maybe Trump’s success in coercing most different U.S. allies and companions into making extraordinary commerce concessions led the administration to overestimate its leverage and underestimate how well-prepared China was for Trump 2.0.
Beijing has been steadily decoupling, attempting to realize autonomous provide chains and insulate its economic system from the USA. Even this yr, exports are up globally however have been down 27 p.c with the USA in September alone. Overseas direct funding is down equally. Beijing has stepped up efforts to scale back the position of the greenback, and a rising share of its commerce in items and providers is finished within the yuan—greater than 30 p.c—facilitating growing nations to transform overseas debt to yuan and pushing “panda bonds.” Trump’s campaign in opposition to clear vitality and electrical autos is ceding international dominance of renewables and autos to Beijing.
Beijing’s rising sense of energy and Trump’s tacit acknowledgement of it have been evident. China demonstrated its escalation dominance with the USA, threatening to halt rare-earth exports in addition to different crucial minerals and inflicting financial ache and boycotting U.S. soybeans. Trump appeared to know that the USA had underestimated China.
Having studied the trajectory of U.S.-China ties over the previous 4 many years, I discern some delicate modifications—new physique language, a brand new sobriety, and tacit new assumptions that won’t sit effectively with the China hawks who have been troubled by Trump’s quest for a deal. We’re coming into the third section of grief: bargaining.
The Trump-Xi summit exhibited extra of a way that the USA was treating China as a peer, displaying a uncommon need for stability. Seeming to replicate the fact that 4 many years of collected interdependence can’t be undone in a single day, U.S. Treasury Secretary Scott Bessent mentioned in October that the U.S. purpose was “to not decouple; it’s to derisk.” Trump mentioned on scale of 1-10, the assembly with Xi “was a 12.” This tracked with Xi’s purpose of stability and predictability, as he emphasised throughout the assembly:
China-U.S. relations have remained secure on the entire. China and the USA ought to be companions and mates. That is what historical past has taught us and what actuality wants. … You and I are on the helm of China-U.S. relations. Within the face of winds, waves, and challenges, we must always keep the correct course, navigate by the advanced panorama, and make sure the regular crusing ahead of the enormous ship of China-U.S. relations.
Assessing what Trump and Xi truly agreed to bears this out. The USA suspended the ten p.c tariffs added for China’s fentanyl precursor chemical exports, and FBI Director Kash Patel says China is cooperating on steps to cease exports of fentanyl precursor chemical substances.
Trump additionally agreed to droop heightened reciprocal tariffs; suspended the addition of dozens of Chinese language corporations that the Commerce Division had added to its Entity Record, which limits exports of U.S. know-how on nationwide safety grounds, for a yr; suspended maritime charges charged to Chinese language ships in U.S. ports for a yr; and prolonged the exclusion of Part 301 tariffs for a yr. All instructed, Trump lowered common tariffs to China to round 45 p.c—lower than these on India or Brazil.
For its half, China suspended international implementation of its complete new export controls (which mirrored U.S. controls) on rare-earth minerals for a yr and pledged to difficulty common licenses to the USA for the export of gallium, germanium, antimony, and graphite, eradicating controls introduced in 2023.
Beijing may also buy agreed quantities of soybeans, finish retaliatory tariffs on different U.S. agricultural merchandise, enable Nexperia to renew export of legacy chips made in China, and cease focusing on U.S. companies for antitrust investigations. In sum, Xi’s coercive threats and motion received China most of its desired response.
It’s, after all, a fragile truce, and one Trump tweet, one Chinese language navy provocation within the South China Sea, or one U.S. gesture towards Taiwan might blow every little thing up. It’s straightforward to backslide to anger, particularly with a risky president and a cocky, overreaching China.
And the underlying structural tensions—predatory mercantilism, steeply sponsored overcapacity, geo-technology, and political-military competitors—proceed to drive strategic rivalry. Synthetic intelligence seems the centerpiece of strategic rivalry, with two very totally different fashions on supply. U.S. main tech companies are in a quest for the holy grail of synthetic common intelligence, whereas China presents a extra sensible, open-source mannequin, interesting to the worldwide south.
However maybe the largest takeaway of the assembly was a mutual dedication to a unbroken technique of dialogue to handle implementation of the deal and, extra broadly, the bilateral relationship. There was settlement on an change of summits, with Trump going to Beijing subsequent spring adopted by Xi coming to the USA. On this vein, U.S. Protection Secretary Pete Hegseth’s assembly with Chinese language Protection Minister Dong Jun in Kuala Lumpur in October and the dialogue of reestablishing military-to-military communications and maybe ongoing relations—although Beijing will attempt to set circumstances—appeared to spherical out this new section.
The place does it lead? These developments seem a big step towards managing competitors, maybe beginning to outline the phrases of what has appeared an unbounded contest. Two huge points didn’t come up on the Trump-Xi assembly—Beijing didn’t increase the Taiwan difficulty, and Trump didn’t talk about the attainable export to China of a scaled-down model of Nvidia’s new Blackwell AI chip. Xi is hoping for stronger reassurance that the USA received’t assist Taiwan’s independence; Nvidia CEO Jensen Huang is lobbying his pal Trump for the China market—and Beijing is already going through chip shortages.
Nuclear weapons are additionally doubtlessly on the desk. Trump mentioned not too long ago that he was engaged on a plan for denuclearization with Russia after which China. Trump, of the Chilly Conflict era, appears to have a wholesome concern of nuclear weapons. Russian President Vladimir Putin, who in 2023 suspended his nation’s participation in New START—a treaty that limits each side to 1,550 deployed warheads and expires subsequent February—has supplied to increase it.
China, which has doubled its nuclear arsenal to about 600, seems on a march towards parity with the USA and is projected to have 1,000 nuclear warheads by 2030 and seems to be planning for brand new nuclear assessments. Beijing rejected talks on nuclear weapons sought by former U.S. President Joe Biden—however new points equivalent to AI and the query of human management of nuclear weapons may open the opportunity of dialogue.
The entire above reinforces the concept that we’ve got moved to bargaining, the third stage of grief. The hawks who search to tighten the screws on China, quickly decouple, and confront Beijing are, for the second, on the again foot. After all, the elemental contradictions and a deep chasm of mistrust haven’t melted away, strategic competitors stays fierce, and the Taiwan query continues to boil.
There’s additionally a possible willingness to speak on the China facet, the place the most recent financial figures level to a nation caught within the mud for now and eager for a lifeline. Xi’s overreach, evident on the latest Fourth Plenum—the place he doubled down on superior, closely sponsored manufacturing whereas speechifying about multilateralism and free commerce—will rankle not simply the USA however a lot of the worldwide south.
Beijing could understand that it overplayed its hand when it flaunted its dominance of crucial minerals with its micromanaging of latest export controls that threatened to carry the world hostage on all electronics—telephones, laptops, auto producers, and far else. China didn’t appear to know that it was freaking out the entire world. The U.S. deal could presage a stepping again.
Which means despair, the fourth stage of grief, continues to be a way off. It could take a real disaster to set off it—or a sense of an actual loss to China in a scientific or navy battle.
The ultimate stage of grief, acceptance, nonetheless appears effectively over the horizon. Neither facet but absolutely accepts the legitimacy of the opposite. Within the Chilly Conflict, it took the existential menace of the Cuban missile disaster and different near-death experiences earlier than the USA and Soviet Union grudgingly accepted the stability of energy and the opportunity of a comparatively peaceable coexistence.
On stability, nonetheless, I think the Trump-Xi assembly displays an evolution of the bilateral relationship. The USA could also be coming to phrases with the fact of its predicament, and China could also be starting to know each its strengths and the boundaries of its scenario. Whether or not it reverts again to the imply or if its momentum pulls the bilateral relationship towards a secure equilibrium is anybody’s guess.
