China and the US can make nice, if not peace

Washington and Beijing have spent nearly a decade trading tariffs, export controls and blacklists, with each round threatening rupture. Yet they keep recovering from the brink.Tensions soared before summits and plunged immediately after. For example, in 2019 at Osaka, Trump walked back threats to impose tariffs on US$300 billion of Chinese goods and eased curbs on Huawei after Beijing reportedly agreed to buy American farm goods. In Busan last October, he lowered tariffs and shelved export controls on thousands of Chinese companies after Xi Jinping suspended some rare earth restrictions and resumed soybean purchases.As the two presidents met at the White House this week, that pattern was repeating. Simply put, decoupling is proving ruinously expensive on both sides: two-way goods and services trade fell 25.1 per cent last year to an estimated US$494.6 billion, with American goods exports to China down 26 per cent.The effective tariff rate on many Chinese goods remains close to 30 per cent – the highest of any country – yet it comes at a mutual cost.Beijing’s leverage explains much of Washington’s current restraint. China controls roughly 70 per cent of global rare earth mining and about 90 per cent of processing capacity; that dependence cannot be engineered away quickly. The administration has notably refrained from threatening steep new tariffs or technology bans before this summit, in contrast to earlier meetings. The US is, after all, vulnerable to Chinese pressure and tacitly admits the need to maintain stable and secure access to critical minerals.US Trade Representative Jamieson Greer said in April that the president seeks stability and is not looking for “massive confrontation” or “full-on conflict” with China. The administration’s November 2025 National Security Strategy declined to name China a competitor, speaking instead of “maintaining a genuinely mutually advantageous economic relationship with Beijing”.This is not friendship, and no one should pretend otherwise. Washington’s grievances – Chinese subsidies, forced technology transfer, opaque ownership, procurement rules that squeeze foreign firms – are here to stay. But don’t expect China to change.