Trump-Xi summit brings a tactical truce

President Trump described his meeting with China's Xi Jinping as "amazing," but the trade war truce reached appears fragile. The agreement essentially reverses recent escalations, with China resuming soybean purchases and the U.S. reducing some tariffs. However, fundamental issues like China's industrial policies remain unaddressed. This outcome reflects Xi's strategic approach and China's realistic expectations for the encounter. Both leaders' warm interaction, however, offered multinational corporations a much-needed respite. Xi emphasized that China's growth aligns with Trump's goals, and Trump praised Xi as a "great leader." The deal provides short-term gains for both, with Trump securing a win before his Beijing visit and Xi easing pressure on manufacturers. Yet, China's rare earth export curbs are only delayed, not removed, causing continued uncertainty for U.S. factories. Experts suggest rare earths remain China's key leverage. The current trade talks are less intensive than previous negotiations, and repeated escalations risk eroding the leaders' personal rapport. This could lead to a very difficult situation for U.S.-China relations.