Trump and Xi’s Fragile Truce: How the US Can Regain the Edge Over China

WASHINGTON – The postponement of a planned March 31st summit between U.S. President Donald Trump and Chinese leader Xi Jinping, triggered by escalating conflict in Iran, has underscored a fragile calm in U.S.-China relations built less on resolution than on mutual strategic convenience. While the trade war remains paused and restrictions on rare earth access have eased, the underlying tensions persist, with both nations leveraging the respite to bolster domestic strength.

Last October, Trump and Xi reached an agreement in Busan, South Korea, to halt novel U.S. Tariffs and roll back Chinese restrictions on American access to rare earths and magnets. This truce, however, appears driven by a convergence of interests to buy time for internal priorities, rather than a genuine attempt to resolve fundamental disagreements. The question now is whether Washington will use this period to reduce its economic dependencies on China and revitalize its national power, or if Beijing will further solidify its position as a global economic force.

A year ago, a truce seemed improbable. In early 2025, Trump escalated trade tensions, imposing tariffs as high as 145 percent. China retaliated with its own tariffs and threats to restrict rare-earth exports – a move that caught the Trump administration off guard, as these materials are critical components in modern electronics and largely sourced from China. The potential disruption to U.S. Manufacturing prompted a shift in Trump’s approach, toward a more conciliatory posture, praising Xi and lowering tariffs. He even began to downplay sensitive issues like Chinese human rights abuses and cyberattacks in favor of securing deals.

Several factors appear to have motivated this recalibration. The growing number of international crises confronting the Trump administration – including conflicts in Gaza, Iran, Ukraine, and Venezuela – coupled with domestic pressures around affordability and immigration, likely contributed to a desire for stability in the U.S.-China relationship. The administration recognized the potential for economic damage from China’s control over critical minerals, as demonstrated by the rare-earth export threat.

American public opinion has as well shifted. A July 2026 survey by the Chicago Council on Global Affairs found that avoiding military conflict with China was the top priority for respondents regarding the U.S.-China relationship. The same survey revealed that 53 percent of Americans believe the U.S. Should “undertake friendly cooperation and engagement with China” to address its growing power, up from 40 percent in 2024. A November 2025 Carnegie Endowment for International Peace survey showed that 62 percent of Americans would not witness their lives worsen if China were to surpass the United States in global influence.

Trump’s personal affinity for dealmaking also plays a role. He views stable relations with China as a pathway to securing agreements on trade, TikTok, and the fentanyl chemical supply chain. He appears willing to prioritize these short-term gains over long-standing concerns about Chinese behavior.

Despite this thaw, the truce remains precarious. As one analyst noted, the agreement between Trump and Xi is little more than a “gentleman’s handshake,” dependent on economic interdependence and a shared interest in avoiding confrontation. Underlying tensions remain unresolved, and many within the U.S. Government advocate for a return to robust competition with China. A military incident in the Taiwan Strait, another incident involving Chinese surveillance technology, or accusations of election interference could quickly unravel the current stability.

Both leaders appear to view the truce as an opportunity to buy time. Beijing’s recently adopted Five-Year Plan prioritizes reducing reliance on foreign technology and accelerating domestic industrial modernization, particularly in emerging technologies like robotics, 6G mobile communication, and embodied artificial intelligence. China aims to lock in its centrality to the global economy and reduce its vulnerability to U.S. Economic pressure.

The Trump administration has identified economic and technological power as crucial to 21st-century national security and believes the U.S. Is losing ground to China. The administration’s strategy involves lowering tensions with Beijing to focus on rebuilding American manufacturing, particularly within the defense industrial base.

To succeed, the U.S. Must prioritize reducing its dependencies on China across critical supply chains, starting with rare earths and critical minerals. This requires expanding long-term contracts, accelerating domestic mining and refining, and funding the development of a complete domestic supply chain. Building stockpiles and establishing price floors to protect U.S. Producers are also essential. Strengthening U.S. Defense capabilities requires streamlining procurement and investing in workforce development in key sectors like shipbuilding and munitions.

However, replicating Japan’s efforts to reduce reliance on Chinese rare earths – which took over a decade to reduce sourcing from 90 percent to 60 percent – will be a long process. The U.S. Currently imports approximately 70 percent of its rare earths from China, and China also controls crucial midstream processing in other vital supply chains, including pharmaceuticals, batteries, and robotics. Complete economic independence from China is likely unattainable. progress will be incremental.

The administration’s preparations for Trump’s now-delayed visit to Beijing have been minimal, reflecting Trump’s personal approach to the relationship. He views his direct communication with Xi as paramount, downplaying the role of traditional diplomatic coordination. This has caused some unease in Beijing, but not alarm. Chinese officials are likely to employ a familiar strategy of flattery, gifts, and investment pledges to influence the president.

A potential outcome of the rescheduled summit could include increased Chinese purchases of U.S. Exports and potentially even Chinese investment in non-sensitive sectors of the U.S. Economy. Trump will likely seek an extension of the trade war truce and Chinese support for resolving conflicts in Ukraine and Iran. Beijing is unlikely to offer concrete commitments but will likely provide enough rhetorical support to satisfy Trump.

For China, the greater prize lies in signaling to U.S. Allies in Asia that they should not rely on the United States for their security. The message will be that Trump prioritizes his relationship with Xi over the concerns of allies and accepts China as a peer competitor.

the actions taken by both leaders during this period of relative calm will determine the future of U.S.-China competition. China is actively working to strengthen its position, and the United States must respond with urgency, focusing on securing supply chains, rebuilding its industrial base, and fostering innovation. The next chapter of U.S.-China relations will be determined not by staged summits, but by which nation demonstrates greater resolve and strategic focus.