Compromise, not a zero-sum game, has delivered results for Trump and Xi — for now

share_windows This article appeared in Crikey on November 3 2025.

In his meeting with US President Donald Trump in South Korea last week, China’s President Xi Jinping expressed his vision of China–US relations in lyrical language thick with metaphor:

In the face of wings, waves and challenges we should stay the right course, navigate through complex terrain, and ensure that the giant ship of China–US relations sails steadily forward.

Xi’s lyricism may have been lost on his counterpart, who speaks the language of deal making:

President Xi has been a good friend of mine for many years. We get on really well. He’s a great leader of a powerful and strong country.

President Trump described his counterpart as ‘a tough negotiator’, but he emerged from the 100-minute meeting in Busan flushed with good news, saying ‘a lot of decisions were made’ and that ‘we’ve come to conclusions on many very important points’.

But the truth is that by the time the two leaders met, their respective foot soldiers had already done the hard slog of working through the nitty gritty details of their major disagreements on the sidelines of the ASEAN summit in Kuala Lumpur, where China’s Vice Premier He Lifeng and US Treasury Secretary Scott Bessent had held two days of talks — the fifth round of such negotiations this year. The two teams came to the table prepared to compromise, because neither Trump nor Xi wanted to go home empty-handed.

Speaking to the media after those Kuala Lumpur negotiations, China’s Vice Minister of Commerce Li Chenggang said the meetings were ‘intense’: ‘The US side was tough; the Chinese side was resolute.’

While many countries have succumbed to the pressure of Trump’s increased tariffs, the trade war against China has proven much harder for the US to win. The meetings in Kuala Lumpur and Busan were held because the US side realised their zero-sum-game thinking had been self-destructive. Each side saw the urgent need to open a safety valve to defuse tensions in the bilateral relationship, so they could walk back from the brink of total economic warfare. If they hadn’t taken, the two superpowers could have been headed for ever-bigger confrontations, each side having the capacity to inflict enormous damage on each other and the rest of the world.

The Kuala Lumpur discussions had to tackle several sticking points. In retaliation against Trump’s tariffs and punitive trade policies, China had decided to boycott American soybean imports, a move that was bound to hurt some of Trump’s own supporters. The US wanted China to stop supplying Mexico and Latin America with chemicals used to make fentanyl, while China wanted access to the US’ technology market, especially the semiconductors used in AI and other advanced technologies.

The biggest dispute was over rare earth minerals. In retaliation against high tariffs, China had said it would restrict the export of rare earth materials and products. The US treats securing rare earth supply chains as both an economic and national security priority. China’s restrictions also effectively block efforts outside China to manufacture rare earth magnets and other products in competition with China.

Shortly after the meeting, China’s Ministry of Commerce confirmed reductions in a range of tariffs on Chinese goods, and China’s decision to suspend export controls on rare earth materials and port fees. It also announced that the two countries would collaborate on fentanyl, and that China would start buying America’s soybeans again.

Taiwan was apparently not mentioned, even though it is clearly front and centre in the minds of China’s leaders. Beijing may have chosen to wait until after the various trade disputes are fully resolved. As Xi said to his counterpart at the meeting, continuing his maritime metaphor: ‘Trade should be the ballast and propeller of China–US relations, not a stumbling block or point of conflict.’

The two leaders are expected to meet again next April.

Those asking questions driven by a zero-sum-game mindset — who blinked first; who won; who had the upper hand — may not have received clear-cut answers. But the significance of the meeting was both symbolic as well as practical, and the outcome has political and economic implications. Trump faces a mid-term election in a year’s time and is currently grappling with a government shutdown, but Xi may be playing a longer game.

Resolution of trade disputes aside, the meeting has enabled the two countries’ leaders to establish a floor for more in-depth dialogues and to build guardrails for such exchanges, allowing them to tackle tougher issues when the time comes.

Just as the Xi–Trump meeting would not have gone ahead without the groundwork of their respective teams, an in-person meeting last Friday between US Defence Secretary Pete Hegseth and his Chinese counterpart Dong Jun would not have happened without Trump having talked to Xi. Meeting for the first time, both Dong and Hegseth stressed a commitment to peace, with Hegseth assuring his counterpart that the US does not seek conflict.

This flurry of meetings has led to a temporary pause in hostilities between the two superpowers. But this truce was due to the reality that, in the short term, a total decoupling is not an option for either nation. Both parties not only need each other but also need more time to deal with their own vulnerabilities.

Despite this reprieve, structural tensions between the two superpowers remain, and though Xi has assured that China does not want to be a hegemonic power, a fundamental distrust of China’s intentions persists. During the meeting, Xi again said to Trump that China’s intentions are benign and that his nation poses no threat to Trump’s goal of Making America Great Again:

Our commitment over the past 70 years has remained the same. From one generation to the next, we have stuck to our blueprint. We have never intended to challenge or replace anyone. Our goal has always been to focus on doing our own job well, on improving ourselves, and on sharing opportunities for development with all countries worldwide.

But many foreign policy makers, both in the US and in allied countries such as Australia, do not buy Xi’s message. Gauging China’s intentions based largely on its capability, many continue to see China as a malign power. Going forward, Australia has the option of behaving like ‘real‘ middle powers do: hedging its bets, while actively facilitating and mediating between superpowers. It could also use the time to develop its own capability for resilience and independence.

In light of these structural tensions, more seasons of this high-stakes drama will be sure to return, even though smaller powers like Australia can breathe a sigh of relief. For now.