Trade Pause Prevents Further Tensions, Yet U.S.-China Technology Dispute Remains Unsettled

At the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, South Korea, leaders wrapped up their meeting with cautious hope following the announcement of a temporary trade ceasefire by U.S. President Donald Trump and Chinese President Xi Jinping. This arrangement, referred to as the "Busan Truce," represents a notable easing in the ongoing trade dispute between the U.S. and China. Both countries have agreed to lower tariffs and work towards stabilizing supply chains, as reported by an

. The agreement, reached during Trump’s short visit to South Korea before continuing his Asia tour, involves immediate reductions in tariffs on Chinese products, a halt to China’s rare-earth export restrictions, and the resumption of U.S. agricultural exports to China, according to .

After Trump’s early exit from the summit, Xi Jinping took the spotlight, reaffirming China’s support for multilateral cooperation and open global trade, according to

. “The more uncertain the world becomes, the more we need to unite,” he stated, casting China as a counterweight to Trump’s “America First” approach. Trump, on the other hand, emphasized that the agreement could help restore American economic strength by revising trade arrangements and supporting local industries, as . The U.S. has cut tariffs on Chinese imports by 10 percentage points, including those related to fentanyl, while China has agreed to pause its retaliatory tariffs and resume major purchases of American soybeans and energy products, according to .

Despite the progress, disputes over technology and semiconductors remain unresolved. Jensen Huang, CEO of Nvidia, whose company is still prohibited from selling advanced AI chips to China, expressed doubts about whether the summit would help his business regain access to the Chinese market, as reported by

. Trump stated that the U.S. will continue to block China from acquiring Nvidia’s Blackwell chips, maintaining strict export controls on sensitive technologies, according to . In response, China has halted its investigations into American semiconductor companies and plans to issue broad export licenses for rare earths and other key materials, The Economic Times reported.

Financial markets responded favorably, with stocks and commodities climbing on expectations of more stable trade, as noted by STL News. The agreement also includes steps to address fentanyl trafficking, with China promising tighter regulation of precursor chemicals, Cryptopolitan reported. However, experts warn that the longevity of the deal is uncertain. Previous U.S.-China trade agreements, like the 2020 Phase One deal, have stumbled due to lack of compliance and ongoing political tensions. North Korea’s strong criticism of South Korea’s denuclearization talks with China highlights the region’s ongoing sensitivities, U.S. News reported.

For American farmers, especially those in the Midwest, the pact offers vital support after years of export disruptions. China’s pledge to buy 12 million metric tons of soybeans this year and 25 million annually through 2028 could bring significant revenue to rural communities, Cryptopolitan reported. The energy and manufacturing industries are also set to gain from reduced input costs and eased rare-earth restrictions, though details on enforcement remain unclear, according to STL News.

Although the Busan Truce provides short-term relief, deeper issues remain. Both countries are under internal pressure to maintain firm positions on matters such as Taiwan and intellectual property. A joint committee will be established to monitor compliance, but its effectiveness is still in question, STL News noted. For now, the truce offers a fragile but much-needed pause in a rivalry that has influenced global trade for many years.