Trade tensions between the United States and China appear to have entered a temporary phase of calm, though the underlying rivalry remains intact. Ahead of a meeting between President Donald Trump and Chinese leader Xi Jinping, both sides signalled a willingness to cool their rhetoric, suggesting that a partial understanding had been reached. Yet the substance of this truce remains uncertain, for the economic and political incentives driving the confrontation are far from resolved.
The Trump administration’s use of tariffs as a tool of leverage has become one of the most disruptive features of global commerce. China’s restrictions on the export of rare earth elements, essential to the manufacture of advanced technologies, were met with threats of 100 per cent tariffs on Chinese goods by Washington. The resulting standoff rattled supply chains and dampened global growth projections. Now, with signs of moderation, markets may breathe easier, but the fundamental contest over technological dominance and strategic autonomy continues to simmer beneath the surface.
At the annual ASEAN summit in Kuala Lumpur, Trump sought to showcase himself as both a dealmaker and peacemaker. The setting provided a convenient stage for his twin ambitions: to stabilise economic ties with Beijing and to demonstrate American influence across a region long courted by China. His visit marked a renewed engagement with Southeast Asia, an arena he had largely neglected during his earlier years in office. The ASEAN bloc, with its combined economy of nearly four trillion dollars and population of 680 million, represents a vital bridge between the Indo-Pacific powers. Trump’s reappearance there was designed to reassure allies that the United States remains a committed player.
Symbolism has always played a central role in Trump’s diplomacy. His presence at a ceasefire ceremony between Thailand and Cambodia was a case in point. The two nations, locked in decades of border tension, agreed to a new truce involving prisoner releases, weapons withdrawals, and third-party monitoring. The arrangement was reportedly achieved through Washington’s economic pressure and conditional trade incentives. While the ceasefire may provide a temporary respite from violence, its durability will depend less on Trump’s theatrics and more on sustained regional cooperation. Still, for Trump, the optics were valuable: he could project himself as a global mediator capable of achieving what others could not.
Beyond symbolism, Trump’s trip included the signing of a series of economic agreements with Cambodia, Thailand, and Malaysia—deals aimed at broadening the supply of critical minerals and reducing dependence on China. The United States, increasingly wary of Beijing’s dominance over rare earth elements, is looking to diversify sources of these vital materials through friendly nations in Southeast Asia. The move underscores a larger pattern in U.S. strategy: countering China not merely through confrontation but by cultivating alternative partnerships.
Trump’s meetings with other world leaders at the summit further reflected his transactional approach. In talks with Brazilian President Luiz Inácio Lula da Silva, Trump indicated a willingness to recalibrate tariffs to secure political concessions related to former president Jair Bolsonaro’s legal troubles. Yet he simultaneously renewed his trade hostilities toward Canada, announcing plans for fresh tariff hikes after Ottawa criticised his economic policies. This contradictory conduct—oscillating between conciliation and confrontation—has become characteristic of Trump’s foreign policy, which prizes short-term spectacle over long-term coherence.
The forthcoming meeting with Xi Jinping will test whether Trump’s brand of pressure politics can yield tangible outcomes. The United States seeks greater access for its agricultural exports and a reduction in the flow of illicit fentanyl, while China wants relief from sanctions and export restrictions. The tone of recent statements hints at an interim truce, but past experience suggests that such truces are fragile. Both economies remain entangled in a contest that goes beyond trade: it is about control of the future’s commanding technologies, from semiconductors to electric vehicles.
Trump’s re-engagement with Asia also carries a domestic subtext. With the U.S. economy slowing and election politics intensifying, he needs foreign policy victories that can be sold at home. Positioning himself as a broker of peace and a guardian of American jobs allows him to blend diplomacy with campaign imagery. Yet this approach risks conflating diplomacy with performance, turning negotiations into staged events rather than durable achievements.
The larger story is one of shifting balance. As Washington alternates between tariffs and truces, Asia continues to evolve into a multipolar region where influence is earned not through coercion but consistency. China’s assertiveness has drawn pushback from many ASEAN members, but they remain cautious about aligning too closely with any major power. Trump’s episodic engagement cannot easily reverse years of Chinese economic entrenchment. Still, the revival of U.S. interest, however theatrical, signals recognition that neglecting Southeast Asia would leave the strategic field open to Beijing.
The coming months will reveal whether the U.S.–China trade thaw is the start of a genuine recalibration or merely another pause in a recurring cycle of rivalry. Trump’s diplomacy, rich in optics but thin in predictability, has restored attention to the region but not necessarily confidence. For now, both Washington and Beijing seem to prefer managed competition to open confrontation. Yet as long as tariffs and export bans remain tools of political theatre, the global economy will remain hostage to uncertainty.
In Kuala Lumpur, Trump danced, smiled, and spoke of friendship. But behind the showmanship lies a hard reality: America’s economic strategy in Asia is still a work in progress, oscillating between aggression and accommodation. The world watches, waiting to see whether the self-proclaimed dealmaker can turn his gestures into genuine global stability.