On Oct. 30, President Donald Trump met China’s President Xi Jinping in Busan, a city in South Korea, for about 90 minutes. He trumpeted his meeting with Xi as a “12 out of 10” and ended his social media post about it with the exhortation: “God Bless China and the USA!” This was the most positive tone coming out of a meeting between the leaders of the United States and China since the Obama era.
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China policy during Trump’s first term in office was defined by “great power competition” with Beijing—a strategy that was largely embraced by the Biden Administration. But Trump seems to be rejecting that rhetoric. He made multiple references to the meeting as a “G2,” or group of two, suggesting a revival of the idea that the United States and China should manage global challenges together.
As it happens, some officials in the Obama Administration did contemplate the idea of a G-2 in the aftermath of the global financial crisis. Back then, Chinese Premier Wen Jiabao rejected the notion because he said “It is impossible for a couple of countries or a group of big powers to resolve all global issues.”
The Obama Administration shelved the idea and declared its “pivot to Asia” in November 2011. But once Xi Jinping came to power, he sought a “new model of great power relations” in which the United States would agree to avoid conflict and confrontation, practice mutual respect for each other’s core interests, and pursue mutually beneficial cooperation. For the last decade, however, those phrases fell on deaf ears in Washington.
The pronouncements by President Trump and senior officials in his Administration after their recent meetings with their Chinese counterparts suggest a break from Washington’s strategic approach toward Beijing. President Trump has hit the rewind button on China strategy.
Irrational exuberance
Defense Secretary Pete Hegseth was remarkably enthusiastic after meeting Chinese Defense Minister Dong Jun. He claimed that the relationship between the U.S. and China has “never been better,” and that the “historic ‘G2 meeting’ set the tone for everlasting peace.” One might have been left with the impression that the two sides had made peace for our time.
What magnificent breakthroughs led to this irrational exuberance? Chinese negotiators basically agreed to reverse some of the policies they put in place earlier this year. For example, China had paused cooperation intended to limit the flow of fentanyl precursors into the United States. Beijing now promises to restart that cooperation, and both countries will suspend port fees charged on each other’s ships.
And China will reportedly delay rare earth export restrictions while resuming soybean and other agriculture purchases from the U.S. If one was transported back in time by a year, nearly all these policies China promised after the Busan meetings would have already been in place.
What did Trump give to Xi to win this reset? Trump lowered the tariff rate on Chinese products. Although China faces higher U.S. tariff rates than it did a year ago, so does every other country. Thus, China’s terms of trade with the U.S. have actually improved this year relative to many American partners.
Furthermore, Trump suspended implementation of the 50% rule for affiliates of listed entities, weakening U.S. technology controls. The rule would have required companies to verify that their Chinese counterparties are not 50% or more owned, directly or indirectly, by parties on the U.S. government’s Entity List or Military End-User List. And Trump promised to pause several investigations and restrictions meant to address unfair Chinese practices. In so doing, Trump gave China a series of concessions that will weaken long term U.S. national security protections.
It could have been worse. Before meeting Xi, Trump remarked, “We’ll be speaking about Blackwell, it’s the super duper chip.” He was referring to the Blackwell B30A chip that Nvidia built to handle advanced AI workload and designed for export to China. The Biden Administration had blocked sales of Blackwell and the less advanced H20 chip to China on national security grounds.
Now Beijing can purchase H20s. After the Trump-Xi summit, Jensen Huang, the Nvidia CEO, spoke about his hopes of selling Blackwell chips to China in the future. If a Democrat had made this decision, Republicans would be screaming from the rooftops.
How China won without playing its best cards
The little good news there was for the U.S. came in the form of concessions avoided, at least for now. Taiwan was reportedly not discussed, despite rumors in the run up to the meeting that Trump might be open to reframing U.S. cross-Strait policy. But some damage has already been done. Alliances and partnerships require predictability, which Trump abhors. After meeting Xi, Trump refused to state what he would do on Taiwan, insisting only that, “You’ll find out if [an invasion] happens…” This will not calm fears in Taipei or other capitals.
What made China’s success all the more impressive was that Xi won these concessions without playing his best cards. China can still dangle a visit to Beijing next year, which Trump wants badly. Xi also did not permit the long rumored TikTok deal, whereby ByteDance would license the TikTok algorithm and create a U.S. joint venture. Instead, the White House continues to violate U.S. law by allowing TikTok to operate in the country.
If necessary, Beijing can also offer Trump purchases of aircraft, aircraft engines, and advanced semiconductors. And it can promise increased access to China’s financial sector. No wonder Beijing put out a statement afterward emphasizing that it has “the confidence and capability to navigate all kinds of risks and challenges.”
Trumpitulation
We should hope for a genuine Sino-American stabilization. But the Trump Administration is falling into a classic trap of interpreting nice sounding phrases and strategically meaningless Chinese promises as fundamental improvements in the bilateral relationship. Zombie ideas such as a G-2 with China were common a decade ago. Trump buried these concepts when he first came to office in 2017. He shouldn’t have disturbed the dead.
In his first term, Trump’s biggest, perhaps only, breakthrough with China was the “Phase One” trade deal in January 2020. Beijing promised to make what the Trump team labeled “structural reforms” on issues including trade, intellectual property, technology transfer, agriculture, and financial services. Of course, China never followed through. In fact, one analysis found that China “bought none” of the $200 billion of additional U.S. exports it committed to purchasing in the deal with Trump.
Yet many expected Trump and Xi to make a “Phase Two” trade deal, which could lead to China finally fulfilling the commitments its made in 2020 “Phase One” trade deal, and take some additional steps. From this perspective, the recent trade deal that the Trump Administration made with Beijing is a step backwards—something closer to a “Phase Zero” trade deal.
Rather than pursuing long-term structural changes to the U.S.-China economic relationship, Washington is now accepting Beijing’s short-term, reversible, and often superficial promises while Beijing buys time and pockets gains. Trump has already capitulated and promised to extend China’s lowered tariff rates until Nov. 10, 2026. Beijing now has few incentives to return to the table.
Xi did not even agree to the fig leaf of structural economic changes. And yet, there are already signs of trouble. Treasury Secretary Scott Bessent remarked after the deal that China had shown itself to be “an unreliable partner.”
Einstein described insanity as doing the same thing over and over again and expecting different results. Six months ago, Trump posted, “The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!” Back then, many in China were confident that Trump would chicken out. After reading the terms of this new “deal,” many in Beijing might have a new term: Trumpitulation.