PHOTO: AFP

REUTERS, Hong Kong

The latest stopgap Sino-American pact underscores how intractable issues central to the broader bilateral relationship have become. US President Donald Trump and his Chinese counterpart Xi Jinping struck a positive tone on Thursday as both leaders rowed back on export controls and more. That should help keep further escalation in check. Yet this strategic can-kicking does little to resolve trade hostilities between the world’s largest economies.

After more than a month of tit-for-tat escalation on US sanctions, shipping fees, rare earths and more, expectations were already low heading into the meeting in South Korea. Per early readouts on the agreement, Washington halved fentanyl-related tariffs to 10 percent—bringing tariffs imposed on Chinese imports to 47 percent, from 57 percent, according to Trump— and suspended expanding its sanctions framework by one year. In return, Beijing pledged to hold off from restricting rare earths exports, also by one year, and buy more American soybeans. Both sides pushed back reciprocal tariffs again, this time for a year. And Chinese stocks barely reacted.

It’s hardly a grand bargain and falls far short of the truce achieved with the so-called Phase One agreement signed during Trump’s first term. Still, this breather benefits the negotiators more than either country or markets. For Xi’s team the meeting provided a symbolic chance to stabilise relations and demonstrate the country’s rare earths leverage in negotiating for better trade terms. Trump meanwhile gets to score political points at home with farmers and help limit supply chain disruptions for American multinationals.

Outstanding issues that have yet to be addressed include tariffs in both directions that cover virtually all of $580 billion in bilateral trade; export controls on sales of Nvidia’s advanced Blackwell AI chips and other advanced tech to China; Beijing’s ongoing probes into US firms’ Chinese operations; Trump’s long-held conviction that low-cost Chinese exports hobble his country’s manufacturers; and the status of Taiwan, to name a few.

At least both sides have agreed to another meeting in April, when Trump will visit China. Even so, not all of these issues could be overcome even if the two leaders were willing, and there’s no reason that next year’s summit will be any more successful. And openly strategic moves—like the recent rare earth procurement pacts between the US and Australia—suggest that each side will use the interim to minimize the other’s leverage.

So this interim “deal” does stave off escalation in the basic sense, but won’t stop it. Both sides may seek greater stability in relations, yet they cannot afford to assume anything but the worst of each other, either.

US President Donald Trump and Chinese leader Xi Jinping agreed on October 30 to a series of de-escalation measures on trade after a series of tit-for-tat tariffs and restrictions. Both sides agreed to push back implementation of repeatedly delayed reciprocal tariffs once again, this time by a year.