Afrasianet - Some observers describe that although trade relations between the world's two largest economies still face many challenges, the constant truth is that the two sides can only prosper through peer dialogue and cooperation based on mutual respect.

On October 30, six years later, Chinese President Xi Jinping met with his U.S. counterpart Donald Trump again in Busan, South Korea, the first meeting between the two presidents during Trump's second term. As the world's two largest economies, China and the United States are the lifeblood of the global economy, especially in light of the current tariff war.

Earlier, the trade and economic teams of the two countries held the fifth round of consultations in Kuala Lumpur, Malaysia, from 25 to 26 October.

After the meeting, the U.S. Treasury Secretary announced that the United States had decided to abandon the plan to impose 100 percent  tariffs on Chinese goods proposed by Trump on the 10th of the same month. The two sides also reached a basic consensus on the extension of mutual suspension of tariffs, agricultural trade and cooperation on fentanyl, export controls, and other issues, paving the way for the leaders' summit during the APEC summit in Busan, South Korea, and also putting the button on a pause in the tariff war between the two countries. China and the United States.

During the meeting, Chinese President Xi noted that economic and trade interactions should remain a pillar and engine of relations, not obstacles or sources of conflict, stressing that the two countries should not slip into a "spiral of mutual revenge."

For his part, Trump said that China is the largest partner of the United States, and that cooperation between the two countries can achieve great achievements globally, stressing that the U.S.-China cooperation will achieve more successes in the future.

Indeed, since the United States unilaterally sparked the tariff war in early April this year, China-U.S. economic and trade relations have been under significant challenges and strain. In less than 10 days, the two sides traded tariffs of 145 percent and 125 percent, respectively. From May to October, the two sides held five rounds of economic and trade consultations in Switzerland, Britain, Sweden, Spain, and Malaysia to calm the escalating trade war and restore stability Bilateral economic and trade relations.

During this period, the two sides reached some points of consensus on issues such as tariff suspensions, but relations were often stalled by contradictory U.S. words and actions. On the one hand, the U.S. side said it was "seeking dialogue," and on the other hand, it continued to increase pressure on China: the U.S. has long abused export controls, imposing sanctions on many Chinese entities in the fields of semiconductors, biotechnology, aerospace, trade and logistics, and others.

In September, the U.S. Department of Commerce issued the Export Control Penetration Rules, placing subsidiaries with more than 50 percent  of entities on the Entity List subject to the same sanctions, expanding the scope of sanctions to thousands of Chinese companies, in a U.S. effort to curb the development of Chinese companies in key technological areas and curb China's technological progress and international competitiveness.

In October, the United States launched an Article 301 investigation targeting China's shipping, logistics, and shipbuilding sectors, imposing port service fees on Chinese vessels entering U.S. ports, whether owned or operated by China, to be raised annually. Washington aims to encourage the use of U.S. ships and revive the domestic shipbuilding industry, which has led to a nearly tenfold increase in port entry fees for Chinese ships, in flagrant violation of international trade principles and the Transport Agreement Maritime between China and the United States. 

 When major power leaders speak publicly, even brief remarks have a special resonance. This is exactly what happened with a post by US President Donald Trump on his platform Truth Social. Ahead of his meeting with Chinese President Xi Jinping in South Korea, Trump announced the convening of the "Group of Two Countries" summit, hinting that the United States and China would coordinate their actions and encourage other countries to follow suit.

China responded directly to Trump's post, declaring that China and the United States can together fulfill international responsibilities, repeating the traditional phrase about the need to build a multipolar world. Chinese bloggers did not hesitate to express their satisfaction. "Trump's announcement of the two-nation summit means an acknowledgment by the United States of the impossibility of maintaining a world order in which America is the sole hegemon. They have acknowledged the reality and want to build a bipolar world with China. So in Europe, not to mention Japan and India, it's not that important."

But Zhao Minghao, a Chinese expert on U.S. relations, believes that the new group of two countries will not lead to joint governance of the world between China and the United States. Competition will impede cooperation, and it will never stop.

Alexander Lukin, director of research at the Institute of Modern China and Asia of the Russian Academy of Sciences, told Nezavisimaya Gazeta: "Trump's words should be taken seriously, but not literally. His goal is to negotiate trade deals with Beijing. But he has no intention of ruling the world jointly with China. America will retain that job. I think Russia should monitor this debate and not respond to it in any way."

The trade war with China that Trump ignited, what are the most prominent facts

U.S. President Donald Trump has made good on  his promise to increase tariffs on Chinese products after accusing Beijing of unfair trade practices and failing to take action on the smuggling of fentanyl into  the United States.

The Republican has imposed additional 10 percent taxes on Chinese goods, in addition to those previously imposed.

Beijing voiced its objection on Sunday, vowing to respond with appropriate measures, and reaffirming that "there will be no winner" in the trade war.

Tensions and developments in relations between the world's two largest economic powers.

Trade between China and the United States totaled more than $530 billion during the first 11 months of 2024, according to Washington.

In this period, Chinese exports to the United States amounted to more than $400 billion, according to U.S. figures, making China the second largest trading partner of the United States, after Mexico.

China is a major supplier of goods such as electronics, clothing and textiles to the United States, according to the Peterson Institute for International Economics.

But the large trade imbalance has long been a concern in Washington, with the Asian giant's trade deficit reaching $270 billion in the first 11 months of 2024, according to U.S. figures.

The massive support provided by the Chinese state to its industry, as well as the unbalanced treatment of U.S. companies on Chinese soil, are helping to fuel Washington's accusations of dumping, that is, of exporting at a lower price than domestic prices, and proving dumping requires more evidence than just an increase in imports, which takes time, according to an AFP report.

However, China's economy remains heavily dependent on exports, which explains the reluctance of its leaders to change the status quo.

What happened during Trump's first term?

During his first presidential term, the real estate mogul imposed tariffs on Chinese imports worth hundreds of billions of dollars. 

The main demands of the United States have been better access to the Chinese market, which is tightly controlled by the state, while national companies gain an advantage.

At the time, Beijing responded by imposing taxes on imports from the United States, which particularly hurt American agriculture.

After long and arduous negotiations, the two countries reached what was called the "first phase" of a trade agreement in 2019, leading to a truce in their trade war.

Under the deal, China pledged to import $200 billion worth of U.S. products, including $32 billion worth of agricultural products and seafood.

What has changed during the Biden era?

After his election in 2020, Joe Biden did not repeal  the tariffs imposed by his predecessor, but adopted a more specific approach to goals.

Washington has stepped up efforts to restrict exports of electronic chips to Beijing, as part of a strategy aimed at preventing U.S. technology from reaching the Chinese military.

The Biden administration has also increased some tariffs in response to what it called China's "industrial surplus," in an effort to counter the impact of government subsidies to Chinese manufacturers, which would flood markets with cheap goods.

Tariffs on electric vehicles have also been doubled fourfold, to 100%, while tariffs on semiconductors have been raised from 25 to 50%.

Batteries, base metals and medical equipment were also targeted in this action.

What can we expect during Trump's second term?

The Republican president proved serious about his threats during his campaign.

But he linked the tariffs to the fate of TikTok's ownership and threatened action if Chinese parent company ByteDance  did not give up on the social network.

China's Ministry of Commerce vowed to respond and "take its own measures ... to resolutely protect China's rights and interests."

For its part, the Chinese Foreign Ministry reiterated that "there is no winner in a trade war or a customs war," considering that this new battle "will inevitably affect and harm future cooperation in the field of counter-narcotics."

Five trump cards China could use in its trade war with the United States

 Chinese exports to the United States have been hit by tariffs of up to 245 percent, and Beijing has responded by imposing tariffs of 125 percent on U.S. imports. Consumers, businesses and markets are bracing for more uncertainty as fears of a global recession grow.

Despite this, Chinese President Xi Jinping's government has repeatedly reiterated its openness to dialogue, but has warned that it will fight to the end if necessary.

Let's take a look at Beijing's arsenal to counter US President Donald Trump's tariffs.

China is the world's second-largest economy, which means it is able to absorb the effects of tariffs better than other smaller countries.

China, with a population of more than a billion people, also has a huge domestic market that could relieve some of the pressure on exporters suffering from tariffs. Beijing is still floundering in decision-making because the Chinese people are not spending enough. But with a range of incentives, from subsidies for home appliances to subsidized airfare for retirees on "silver trains," this could change.

Trump's tariffs have given the Chinese Communist Party a stronger impetus to unleash the country's consumer potential.

Mary Lovely, a U.S.-China trade expert at the Peterson Institute in Washington, D.C., told the BBC's NewsHour programme earlier this month that the Chinese leadership may be "fully prepared to endure pain to avoid succumbing to what it believes to be American aggression."

Although trade relations between the world's two largest economies still face many challenges, the unmistakable fact is that the two sides can only prosper through peer dialogue and cooperation based on mutual respect.

But this dialogue in the volatile era of Trump will not last long, according to observers, as the trade truce hides many of the future differences that are not going to be on the surface.