Trump revives G2, Xi wins long game

Last week’s historic meeting in Busan, South Korea, between the US and Chinese presidents, Donald Trump and Xi Jinping, is a disruptive game-changer that will gradually reset the global order. That is not because Trump called the meeting a G2 Summit, but because the US did not call itself the Pacific power. After his meeting with China’s Minister of National Defence Admiral Dong Jun, US Secretary of War Pete Hegseth said: “I highlighted the importance of maintaining a balance of power (with China) in the Indo-Pacific.” Never before has the US used the term “balance of power”. The G2 idea was floated early in Obama’s term. Yet he, along with the short-lived British Premier David Cameron, had vowed that the US and the UK would remain superpowers, emphasising that there was no room for other poles of power. The US has climbed down a lot since then in its dealings with China. In fact, China has walked away as the winner.

Despite Trump’s spin on the meeting, the outcome is, at best, a one-year truce in the trade war: China agreed to allow rare earth exports for a year and the US halved the duties on Chinese imports, with the tariff rate now averaging 45%. The general relief over making China yield on this score only shows how integral minerals are to trade diplomacy today, and how effectively China has leveraged—over decades—its dominance in the sector. The truce also marks the start of a new cold war, with Trump ordering the Pentagon to resume testing of nuclear weapons after a gap of 33 years, a move apparently aimed at China and Russia. For his part, even as he sought to win over other nations at the Asia-Pacific Economic Cooperation Summit, Xi warned them against joining the US to reduce the world’s reliance on Chinese supply chains.

The outcome of the Trump-Xi meeting, among other things, reflects the divergent strategies adopted by the big two—Trump pushing long-time partners into new collaborations on the side, while China looks set to reap the dividends of a long game played well. Trump seeking Xi’s help to end the war in Ukraine effectively subordinates Europe to both Washington and Beijing. The pause in geopolitical uncertainty provides relief for the US-led West and China, but does not bode well for India. On the face of it, China-US pacts, especially when Pakistan is playing both, can increase New Delhi’s unease. More consequential is that it could spell the end of the Quad (Quadrilateral Security Dialogue) comprising the US, Japan, India and Australia, and cut short the US ‘pivot’ to Asia, where India saw a big role for itself.