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US-China Trade Summit: Did Xi Jinping simply surrender? Rare Earths: China agreed to suspend new rare earth export controls for one year. The United States agreed to drop its threat of imposing 100% tariffs. Trump announced that the "rare earth barrier" had been removed and immediately boasted that his policies had brought great benefits to other bourgeois governments that would otherwise have been overwhelmed by them. The United States has agreed to suspend its plan to expand its Entity List, a plan that had threatened to include subsidiaries and, if implemented, would have dealt a heavy blow to Chinese capitalism. Beijing says this policy triggered its tightening of rare earth controls. The Entity List is a blacklist of Chinese companies designated as "national security" threats by the U.S. government, with telecommunications giant Huawei being the most prominent example. China holds a leading position in the global rare earth industry, accounting for 60% of global mining and 90% of global processing. This demonstrates how "democratic" capitalism can exploit capitalist authoritarian regimes when it is most beneficial to its own interests. From mobile phones and artificial intelligence (AI) chips to F-35 fighter jets, various products rely heavily on rare earths. While rare earth minerals are actually quite abundant, their mining and processing can be harmful to workers and the environment. Refining one ton of rare earth can generate 2,000 tons of toxic waste. Semi-slave labor without unions was once the solution for global capitalism, and for decades, global capitalists willingly outsourced rare earth mining and processing to China. Many of China's rare earth producing areas have been severely damaged and may take 300 years to clean up. Agriculture: China has agreed to purchase 12 million tons of US soybeans by January next year, and 25 million tons annually for the next three years, along with other agricultural products. Trump touted this as a "big deal" for American farmers, but in reality, it simply returns everything to the state it was before Trump's return to politics. Normally, China purchases 50-70% of US soybean exports. However, this year, Beijing has completely stopped buying US soybeans, instead importing from Brazil and Argentina, using this as a negotiating tactic in the trade conflict. Port Fees: Both sides also agreed to suspend the collection of berthing fees from each other's vessels, an agreement that took effect last month. This is a victory for China, as the number of Chinese ships entering and leaving US ports far exceeds the number of US ships entering and leaving Chinese ports. However, this is not a major concession made by Trump. To date, this shipping fee policy has neither revitalized the US shipbuilding industry nor slowed China's leading position in the industry. Instead, these fees have created cumbersome administrative work for US port authorities. Chips: The US government refuses to make any concessions on semiconductor exports to China (at least not yet reported). Trump has stated that his administration is merely an "arbitrator or referee" between Beijing and US tech companies. This highlights that the battle over technology and AI is the most decisive front in this broader trade war; a war that is essentially a military competition. Since the Biden administration, the US has banned the sale of cutting-edge chips, such as Nvidia's Blackwell chips, to China, while Nvidia itself has been lobbying for a relaxation of the ban in order to earn more profits from the Chinese market. Nvidia was the world's first company to reach a $5 trillion market capitalization, but the AI bubble in the US and globally may be about to burst. TikTok : Trump claimed that an American company has "completed a deal" to acquire TikTok , the Chinese-owned social media platform, but no new details have been released yet. Beijing, during the Busan talks, only stated that it would "properly resolve issues related to TikTok with the US." Tariffs: The US's 10% tariff reduction on Chinese goods is the most significant change resulting from the talks between Xi Jinping and Trump, ostensibly to reward China for progress in curbing the influx of precursor chemicals used in fentanyl production. Trump made similar remarks about "progress" during his first visit to China in 2017. Trump's second term has made the "war on drugs" a key part of his coercive foreign policy, not only for the US-China conflict but also for showcasing his military power in the Caribbean. To date, 64 people have died in US airstrikes in the Caribbean. This 10% reduction brings the average US tariff rate on Chinese goods down to 47%, still among the highest globally. China's tariff rate on US goods is 10%, with another 24% tariff (the so-called reciprocal tariff) suspended under the truce agreement. Which side won? Ninety-nine percent of the world's media outlets seem to have completely misunderstood the reality, claiming that China is winning the trade war, with even the New York Times claiming that Xi Jinping and the CCP regime "look stronger" after the Busan talks. Many left-wing organizations, such as the Revolutionary Comintern (RCI, formerly the International Trends in Marxism [IMT]), have made the same mistake, overestimating the strength of the Xi Jinping regime and underestimating the crisis facing China. This is not to say that Trump or the US is powerful or stable. As we explained in previous articles, neither side will win this conflict. Both regimes exhibit historic economic and political crises in the capitalist systems of China and the US. The Chinese regime has yielded, accepting an extremely unequal tariff arrangement—47% to 10%—and considers it the best outcome achievable so far. Under the terms of the truce, this unequal tariff rate will remain in place until November 2026. Clearly, this is by no means a victory. It is no better than many other regimes that succumbed to Trump from the outset, and in some ways, even worse. On October 9, the Chinese Communist Party regime threatened new restrictions on rare earth resources, a move that initially caught the Trump administration off guard. However, three weeks later, the measure was abruptly withdrawn, raising numerous questions. If, as many Western commentators speculate, this move was intended to increase China's leverage before the Busan summit, what specific concessions did China obtain? What happened between October 9 and 30 that led to Xi Jinping's dramatic 180-degree turn? The answer lies in the Fourth Plenary Session of the 19th CPC Central Committee. The Fourth Plenary Session of the 19th CPC Central Committee, held from October 20-23, was a crucial and highly confidential meeting for the top leadership of the CPC. On the surface, nothing seemed to change as a result of this meeting, and Xi Jinping appeared to still have "complete control" of the regime. However, in reality, this plenary session appeared to be the stage for a fierce power struggle within the CPC, a struggle that may have significantly weakened Xi Jinping's power within the dictatorial ruling machine. Most notably, Xi Jinping appears to have lost control of the People's Liberation Army (PLA)—whether partially or completely, is difficult to say. The PLA is undergoing its largest purge in 60 years, with hundreds of generals and senior officers being dismissed. Most commentators simply attribute these purges to Xi himself, seeing them as a continuation of his earlier purges aimed at consolidating power in his own hands. But since the Fourth Plenum, it has become increasingly clear that those being purged, arrested, and disappeared are Xi's supporters within the military, while anti-Xi factions are carrying out this round of purges. Xi Jinping's behavior during his meeting with Trump was clearly influenced by the "Fourth Plenum effect." From the CCP's perspective, and especially from Xi Jinping's own past record, this meeting was quite bizarre in some aspects, even unprecedented. The fact that Xi Jinping read word for word from a two-page A4 document in oversized font sparked heated discussions on social media. Trump, on the other hand, did not look at a script (of course, what's the point of looking at a script if you're always repeating yourself?). Xi Jinping stated that China and the United States should be "partners and friends." Even more surprisingly, he also told the US president, "You are very concerned about world peace... I appreciate your great contribution to the recent Gaza ceasefire agreement." Anyone who heard this would probably be so shocked that they would fall off their chair. Xi Jinping has also acknowledged Trump's role in mediating the Thai-Cambodian peace process. Admittedly, the Chinese regime has been aware of Trump's obsession with winning the Nobel Peace Prize and has engaged in some psychological manipulation for diplomatic purposes. But Cambodia is a vassal state of China, even an economic colony, yet its leader (alongside several other governments) has just nominated Trump for the Nobel Peace Prize. Hamas has also been courted by the CCP. Given the significant geopolitical interests the Chinese government holds in regions including the Middle East, Iran, and Southeast Asia, it is truly alarming that a CCP leader now acknowledges the US's primacy in these regions and even glorifies its actions as "peaceful." Minor humiliation and severe humiliation For any Chinese leader, expressing such high respect to one of the most aggressive representatives of American imperialism would be an extraordinary act, but for Xi Jinping, who champions wolf warrior nationalism, it is even more inconceivable. Even more shocking is that Xi Jinping went so far as to say that China's development can coexist with "making America great again." To be clear, this report was published in official Chinese state media, just in case we think it was a typo. Besides these remarks that are clearly out of character for Xi Jinping, there are other oddities. During the Busan talks, the Taiwan issue was completely absent from the discussion, a fact Trump later described as "surprising" in a 60 Minutes interview. For any Chinese leader, especially Xi Jinping, even a routine mention of the Taiwan issue as "China's internal affair" requiring "proper handling" by the US is highly unusual. In Xi Jinping's last two meetings with former President Biden, the Taiwan issue was a key sticking point. At this critical juncture in the trade war, why didn't Xi Jinping's team at least mention the Taiwan issue to gain some leverage? Furthermore, to implement his aggressive militaristic agenda, just hours before the meeting, Trump announced that the United States would resume nuclear weapons testing for the first time in 33 years—a move clearly aimed primarily at the Chinese regime, but also at China's allies Russia and North Korea. Xi Jinping's delegation in Busan chose to ignore this. Trump's decision to announce this on the eve of the talks was clearly intended to increase pressure on Xi Jinping. The fact that Xi Jinping and his delegation did not respond indicates their greater urgency to reach an agreement. As mentioned earlier, the location of this meeting was also unprecedented. This was the first time a leader of the People's Republic of China had met with a head of government from another country at a foreign military base, let alone a U.S. ("co-located") military base. This alone was enough to cause Xi Jinping to lose face. Although most media outlets turned a blind eye to this and still believed that Xi Jinping had "firmly" controlled the CCP, the Trump administration and its intelligence agencies should now realize that an unprecedented power struggle is unfolding within the CCP. The resumption of nuclear testing and the selection of the Kimhae Air Base, a city with numerous luxury hotels and other neutral venues, as the meeting location can hardly be considered accidental. Rather, it seems more like a carefully orchestrated arrangement by Trump to further pressure Xi Jinping and test the severity of his predicament. While we cannot know exactly what is happening within China's most secretive "black box" regime, the CCP's abrupt shift on the rare earth issue and the unprecedentedly submissive attitude of its nationalist president indicate that the internal crisis within the CCP is now extremely severe. This is not surprising to the International Socialist Path (ISA) and Marxists, given our long-standing reporting on the devastating economic crisis of Chinese capitalism. For American capitalism, any gains achieved by Trump's unilateral trade war and imperialist bullying will inevitably come at a cost, and that cost is likely to arrive soon — manifesting as a massive crisis in the increasingly parasitic American economy, a new foreign policy disaster, and social unrest. Neither Beijing nor Washington can resolve its own crisis, nor can they resolve the crisis of its global system. https://chinaworker.info/zh-hant/2025/11/04/48228/ Back |
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