Editor’s Introduction: Hi there. In this week’s Asia Policy Brief, ASPI’s Managing Director Rorry Daniels asks three key questions following the Trump-Xi Summit in Busan last month: what is the nature of U.S.-China relations today; can the two sides maintain a “no surprises” expectation; and what more will be asked, and what more will be given as diplomacy between the U.S. and China moves forward into 2026 and beyond?
State of Affairs: A Durable Ceasefire?
Presidents Donald Trump and Xi Jinping met on October 30 in South Korea to codify a ceasefire in the U.S.-China trade war following months of negotiations that were punctuated by high-profile announcements of additional trade restrictions. The two leaders agreed to roll back these restrictions for at least one year; to suspend or halt additional investigations on both side in the trade, tariff, and tech spaces; and for China to take additional actions on fentanyl precursors as well as purchase key U.S. agricultural and forestry goods. Though both sides characterized the meeting as productive, with Trump giving it a 12-out-of-10 rating, key questions remain regarding the durability of the deal, U.S.-China relations on areas outside the scope of the deal, and what it all means for bilateral, regional, and global stability.
Why It Matters: Questions Remain, So What to Ask?
The U.S.-China relationship has oscillated so wildly in 2025 that it’s difficult to assess the durability of the agreement reached in Busan, much less the long-term implications for the relationship. Instead, here are three questions to consider as events unfold:
Is this a “New Type of Major Power Relations,” and if so, what type?
The second Trump administration now has a roadmap of sorts for conducting diplomacy with China, including a list of priority areas, a timeline of key deliverables, and a structure for negotiation that mirrors past practice (though with a much narrower brief). However, these parameters set the table for the period ahead, not the floor or ceiling for the relationship. Trump went into the meeting touting a “G2,” but the meeting did not produce a joint statement that suggests such a G2 with a unified view of its own relationship or how the world should work. Trump’s statement is best viewed as a factual observation—these two countries have the most power in the world—instead of a predictive theoretical lens in which the two countries make coordinated decisions regarding leadership of the rest of the world.
Nor is the relationship destined to overcome the so-called Thucydides trap, in which anxiety about a rising power prompts war with an established power—the purpose behind Xi Jinping’s articulation of a “new type of major power relations.” The reverberation of ups and downs in the bilateral relationship through global economic and security planning show that we are also not in a truly multilateral, G-zero world.
So, what is the nature of the U.S.-China relationship today? How will the two countries navigate a G2 structure in which they remain economically co-dependent while fiercely competing for absolute influence and power? Are the ceiling and floor of the relationship closer together, or are we facing a funhouse of different sized rooms and distorting mirrors depending on the issue?
Will leaders successfully devolve negotiating authority to mitigate policy surprises?
Both leaders, in their own ways, are willing to force their domestic political economy strategies on the rest of the world through industrial policy and weaponized interdependence. These are long-term, big-picture, top-down strategies to navigate transitions in the political economy regarding the changing tech and security landscapes, and they are often the source of friction between the two economies. The strategies can be accelerated or decelerated depending on leader-level priorities, but the ultimate destination—self-sufficiency and deference to power at home and abroad—aren’t going to change.
The challenge is that these strategies not only clash with the reality of economic interdependence and its effect on political economy, but they are now considered a negotiation tactic. At the end of the summit, the leaders basically agreed to walk back escalatory strategies and make minor gestures of goodwill. In other words, many of the deliverables erase, delay or lower trade restrictions that weren’t present at the start of negotiations.
What remains to be seen is whether this escalation and ceasefire pattern will continue as a new normal or if it can be confined to an adjustment period with a new U.S. administration. It’s also unclear to what extent new export controls, commercial investigations and other restrictions are seen as negotiation leverage or simply the culmination of ongoing process, poorly timed. Can the two sides set a ‘no surprises’ expectation and stick to it, despite bigger machinations at play in both bureaucracies? Or will we see another cycle of escalation to ceasefire to negotiation to escalation?
What are both sides’ expectations on the scope of diplomacy moving forward?
Both sides feel like they injected some goodwill back into the relationship, but what do the leaders believe these investments augur in the short and medium term? The readouts provide a sharp contrast into how the meeting was assessed by each side. The Chinese readout is narrative-based, focused on a vision for the long-term future of the relationship, and heavy on describing Trump’s praise for Xi Jinping’s leadership. The U.S. readout is action-oriented, heavy on deliverables, and describes the meeting as a win for the American people.
Both readouts support the mindset the leaders want to foster at home—they are in charge, they know what they’re doing, and they’re getting results. If the U.S. and China are locked in a long-term competition, both sides want to show they are on the winning path. However, to keep this momentum up will require continued success in implementing the deliverables as well as success in asking for more. What more will be asked, and what more will be given? What status quo would be mutually acceptable, and can it be reached? And how will what has primarily been a trade negotiation evolve to address other priorities like maritime territorial issues and Taiwan?
What to Watch: 2026 and Beyond
A new cycle begins. The most stabilizing outcome of the summit was a notional timeline for assessing results and making continued progress. The two leaders not only committed their teams to monitoring compliance and holding further talks, while President Trump also announced his commitment to visit Beijing next April. With China hosting APEC next year, there is another opportunity in November to solidify bilateral agreements. These two opportunities are action-forcing moments for the two teams to get over the finish line.
The world reacts—and has to press their own interests. The U.S.-China goldilocks era is over and may never return, when relations were not too hot and not too cold and therefore created space for the rest of the world to play the powers toward their own interests without fear of being forced to choose a side. Instead, this is an opportunity for the middle powers to foster and bolster a rules-based order, but it remains unclear if there is enough shared interests and collective will to balance the two enormous superpowers in tandem. Expect to see new and riskier balancing strategies emerge from the countries of Asia, while India makes a play for leadership of the Global South.
Whither Taiwan? Taiwan was a very risky topic to raise at the actual meeting, given Trump’s tendency to speak off-the-cuff and his immediately prior meetings with Japan’s new hawkish prime minister. But the Trump administration did pay lip service to Beijing’s preferences on Taiwan before the meeting—curtailing a transit visit from Taiwan’s president, Lai Ching-te, and publicly stating the U.S. position that it does not support Taiwan independence. Do continuous U.S.-China negotiations put the U.S.-Taiwan unofficial relationship on ice for the duration? If not, how will Beijing use the negotiations to press its interests?
Dive Deeper with ASPI:
Watch Wendy Cutler moderate an expert panel discussion that unpacked the 2025 APEC Summit’s outcomes; evaluated APEC’s path forward in addressing trade tensions, digital transformation, and supply chain resilience; and previewed China’s 2026 priorities.
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Read ASPI’s first issue of Asia ASAP: Trump and Xi Meet in Busan, featuring expert commentary from Wendy Cutler, Rorry Daniels, and Neil Thomas.