Aletho News

In Busan, China did not just stand firm—it watched America blink

By Salman Rafi Sheikh – New Eastern Outlook – November 16, 2025

Beyond the optics of handshakes and photo-ops at the Busan summit, the much-hyped Trump–Xi meeting laid bare the paradox that defines US–China relations today: deep economic interdependence coupled with unrelenting strategic rivalry.

Washington’s fear of Beijing’s ascent—and Beijing’s determination to rewrite the terms of global power—mean that even when the two leaders talk of “cooperation,” they are really negotiating the limits of competition. Far from heralding a new détente, the Busan meeting merely pressed pause on a conflict too entrenched to be resolved by diplomatic theatre.

The Summit of Distrust

At the Busan meeting, Donald Trump and Xi Jinping announced a limited set of economic and diplomatic understandings aimed at easing immediate tensions without altering the fundamentals of their rivalry. The U.S. agreed to reduce certain tariffs on Chinese imports, while China pledged to resume large-scale purchases of American agricultural products and to delay the expansion of its rare-earth export controls. Both sides promised greater cooperation on curbing fentanyl precursor exports and maintaining stable supply chains, and they reaffirmed the need to prevent escalation in trade and technology disputes.

While the Busan deal was hailed as a diplomatic breakthrough, it exposed a deeper void: there is still no framework for strategic coexistence between Washington and Beijing. The reason is simple—there is no trust. Beijing knows that under Donald Trump, U.S. foreign policy swings between confrontation and concession, depending on the political winds. And despite years of tariffs and rhetoric, Trump’s trade war has failed to dent China’s global standing. If anything, Beijing has learned how to weaponize US vulnerabilities. By withholding soybean purchases and rare-earth exports, it extracted precisely what it wanted in Busan: a rollback of select tariffs and a pause on new export controls. The so-called “agreement” restored the status quo—China promised to resume buying soybeans, a gesture aimed squarely at Trump’s Midwestern base, while deferring for a year the rare-earth restrictions that Washington fears most. The optics looked like cooperation; the substance showed who really dictated the terms.

Therefore, the Busan summit was less a diplomatic reset than a reckoning for Washington—a reminder of how limited its leverage over Beijing has become. After years of tariffs and bluster, the US has discovered that China can absorb the pain, reroute its exports across Asia, and keep its economy humming. The numbers tell the story: China’s trade surplus this year is projected to exceed last year’s record levels, and its stock market has surged more than 30 per cent in dollar terms, even as US inflation, stoked by tariff pressures, hit an election-year high of 3 per cent. Beijing has not only weathered the storm but also turned it into a strategy. By weaponising its $12 billion soybean market and dangling rare-earth supplies, China forced Washington into a truce on its own terms. In Busan, it wasn’t China that blinked.

Who will blink next?

The real question after Busan is not whether the US and China will clash again, but who will blink first. Washington’s arsenal of tariffs and tech bans is running up against the limits of its own economic pain threshold, while Beijing’s state-driven resilience is tested. Trump’s “America First” protectionism, fueled as it is by an aggressive form of politics, may soothe his domestic base, but it erodes US influence among allies, both in Europe and in Southeast Asia, who now see a power more obsessed with trade deficits than offering and/or providing strategic leadership. China, meanwhile, is playing a longer game: tightening regional supply chains, expanding the yuan’s footprint, and anchoring new trade corridors from Asia to Africa. Both sides are recalibrating rather than retreating, but the advantage increasingly lies with the player who can endure short-term costs for long-term control. If Busan revealed anything, it is that China is betting on (growing) American fatigue while America is still betting on Chinese collapse, which remains an unlikely event to take place even in the distant future.

In the end, Busan revealed not a reset but a reckoning: China has learned to endure pressure, while America has learned the limits of its own leverage. The US–China rivalry is now a contest of stamina, not ideology, in which Beijing appears better equipped to play the long game. With expanding regional trade networks, a growing technological base, and a much better, state-driven, and state-backed capacity to absorb external shocks, China has turned resilience into a strategy. Washington, by contrast, remains trapped between domestic populism and global ambition, unable to sustain confrontation without hurting itself. Busan showed that when forced to choose between economic pain and political optics, it is the US that blinks first. Therefore, what Washington can learn is this: in this rivalry of endurance, China’s patience—not America’s pressure—may prove decisive. The sooner it learns this lesson, the less it will hurt itself.

Salman Rafi Sheikh, research analyst of International Relations and Pakistan’s foreign and domestic affairs

November 16, 2025 - Posted by aletho | Economics | China, United States