Trump and Xi agree to suspend punitive tariffs, open military hotline in Busan summit

United States President Donald Trump and Chinese President Xi Jinping held a pivotal summit in Busan, South Korea, on 4 November, on the sidelines of the APEC forum.

The meeting resulted in agreements to suspend retaliatory tariffs and open a direct military hotline.

Trump described the discussions as productive, focusing on trade, Taiwan, and fentanyl.

Tariff suspension and economic deals

The leaders agreed to a one-year deal on rare earths and reduced fentanyl-related tariffs to 10%.

Trump announced a planned visit to China in April 2026. He stated that the US tariffs on China will be cut to 47%.

Trump called the meeting a "great success," rating it "12 on 10".

The de-escalation suspends retaliatory measures, providing relief amid ongoing tensions.

Military hotline and security commitments

The summit led to the establishment of a direct military hotline to prevent miscalculations.

Trump said Taiwan "never came up" in the meeting: "They know the consequences" of military action. He claimed Xi assured him that China won't take action on Taiwan during his term.

The hotline aims to reboot communication channels between the two militaries. US officials noted it as a step to manage risks in the South China Sea and Taiwan Strait.

Shifting dynamics in US-China relations

Experts observed a shifting power dynamic, with advantage leaning towards Xi in the long term.

Trump hailed the meeting as "amazing" while Xi promised to protect free trade at APEC, stating: "China’s Xi promises to protect free trade at APEC as Trump snubs major summit."

The agreements signal a temporary thaw, but underlying issues like technology and security persist.

Trump revived the G2 concept, focusing on bilateral deals over multilateral forums.

The tariff suspension could ease pressures on global supply chains. Nomura analysts noted potential benefits for allies like India in offsetting trade shifts.

As Trump prepares for Xi's reciprocal visit, the summit sets a tone for de-escalation. However, experts warn of volatility if commitments falter. The meeting's outcomes highlight Trump's deal-making approach in his second term.