The Trump–Xi meeting at Busan on 30 October 2025 has been described in global commentary as heralding a US–China “reset" or the “G2 reset". In immediate terms, this was a de-escalation. The United States cut the fentanyl-linked tariff from 20 per cent to 10 per cent, reducing the overall average tariff burden on Chinese imports to around 47 per cent rather than the 57 per cent implied by the autumn escalation. China, in return, deferred its new rare-earth export controls, signalled general licensing flexibility on key critical minerals, and agreed to resume large-scale agricultural purchases of US soybeans. However, the agreement is formally time-bound to one year with annual re-negotiation cycles.

Furthermore, defence ministries of Washington and Beijing agreed to reopen military-to-military communications channels to restore basic de-confliction architecture at sea and in the air. In other words, the much-hyped trade deal lowered systemic temperature, but did not restructure the competitive logic of the relationship in any way.

For bilateral relations, the period between 2018 and 2025 saw an evolution from tariff-based coercion to what scholars now term “capability denial". The early US tariffs under the Section 301 investigation opened an asymmetric confrontation, with China initially on the defensive. However, by late 2019 the trade war was already migrating into the technology domain. In Trump 1.0, US controls on semiconductor equipment, advanced compute and chip architectures hardened steadily and were inherited, and then amplified, in subsequent cycles.

Xi’s China absorbed those shocks by cultivating redundancy, that is, by diversifying agricultural sourcing away from the United States, expanding state support for domestic manufacturing in strategic sectors and building a credible threat of resource retaliation through rare-earths and other strategic minerals. But, by 2023–25, the trade war was no longer merely a tariff war. It had become a layered struggle where supply chains, data, AI training power, chip design, maritime signalling........

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