Trump–Xi Summit in Busan: A Tariff Truce, A Tech Gamble, and the Battle for the Digital Future

The world’s two biggest economies have called a temporary ceasefire in their long-running trade war, but beneath the smiles and handshakes in Busan, South Korea, lies a new kind of contest: the race for control of tomorrow’s technology.

At the APEC 2025 Summit, U.S. President Donald Trump and Chinese President Xi Jinping signed a “framework agreement” aimed at stabilizing trade relations and mitigating market turbulence. The deal covers tariffs, rare-earth exports, and agricultural trade, yet it leaves the thorniest issue unresolved: who controls the world’s high-end chips, artificial intelligence, and quantum computing ecosystem?

What’s Inside the Deal

According to reports by Reuters, Politico, and The Washington Post, the Busan framework includes three key elements:

Tariff Truce: The U.S. will reduce some tariffs on Chinese imports, lowering average duties from about 57% to 47%, particularly on chemicals used in fentanyl production. China, in turn, will maintain restrictions on synthetic drug precursors and expand agricultural imports.

Rare-Earth Access: China agreed to resume exports of critical minerals like neodymium, dysprosium, and terbium, essential for EV batteries, wind turbines, and advanced defense systems. This prevents an immediate shock to global tech and energy supply chains.

AI & Chip Talks: The U.S. and China will open a negotiation channel over semiconductor and AI technology exports. Trump told reporters he discussed Nvidia’s “super-duper Blackwell chip” with Xi, a nod to Washington’s ongoing restrictions on high-end chip sales to China.

Why This Matters for Global Business

This “Busan Truce” offers a short-term relief to investors and manufacturers who have endured years of trade uncertainty. But analysts warn that the structure of the global economy is being quietly rewritten.

“This isn’t just about tariffs; it’s about control of the future’s most strategic resources: data, chips, and minerals,” said Emily Schwartz, a trade analyst at the Peterson Institute.

Stock markets reacted positively in early trading:
The S&P 500 rose 1.2%, led by chipmakers and automakers. The Shanghai Composite gained 0.9%, reflecting optimism over export stability. But the Nasdaq fell 0.5% later in the day as investors realized the deal left key tech export bans intact.
In short, businesses are cheering, but cautiously.

Rare-Earths and Supply-Chain Rebalancing

China currently controls around 60% of global rare-earth production and nearly 90% of processing capacity. These materials are vital to the energy transition and the digital economy, from EVs to smartphones.

By committing to maintain export flows, China avoided spooking global manufacturers, but the message is clear: Beijing knows its leverage.
For countries like Nigeria, Namibia, and Tanzania, this moment highlights the untapped potential of their mineral resources. Nigeria, for instance, has deposits of niobium and rare metals that could attract new Western investments as companies seek to diversify away from Chinese dominance.

However, this opportunity depends on whether African governments can build transparent mining governance systems and court global partnerships without repeating the resource-curse pattern.

The Battle for Technological Supremacy

The real fight isn’t about soybeans or sneakers; it’s about the digital architecture of global power.
Trump’s public mention of Nvidia’s “super-duper Blackwell chip” was more than a quip; it reflected Washington’s anxiety over AI chip leadership. The U.S. still dominates in chip design, but China is racing to localize production and develop quantum-ready processors.

Xi Jinping’s government has poured over $100 billion into national semiconductor funds, while U.S. firms like Nvidia and AMD face export controls designed to limit China’s military AI capabilities. The Busan meeting did little to change that, meaning the tech cold war remains firmly in place.

“Think of this as a ceasefire with sanctions still loaded,” one European diplomat told Reuters.

What It Means for Africa and Emerging Markets

While Africa wasn’t at the negotiation table, it stands at the intersection of both giants’ ambitions:

China’s Belt and Road continue to fund ports, data centers, and fiber networks across the continent.
The U.S., through the Prosper Africa and Digital Transformation with Africa initiatives, is counter-investing in clean energy and digital trade corridors.

The Trump–Xi truce could stabilize global markets, making it easier for African exporters and tech startups to access cheaper imports and investment flows. Yet it also underlines Africa’s vulnerability to external shocks: a future escalation could still disrupt access to chips, electronics, and digital infrastructure financing.

For Nigeria’s fintech and e-commerce sectors, this means planning for diversification, sourcing multiple hardware routes, exploring local assembly, and building digital sovereignty.

Forward-Looking Insight

The Busan deal may not end the U.S.–China rivalry, but it redefines its next chapter.
The global economy is moving toward a dual-system model, one orbiting around the U.S. and its allies, and another around China and its technology ecosystem. This bifurcation will influence where data is stored, how chips are made, and even how AI is governed.
For emerging economies, the takeaway is clear: neutrality won’t be enough; strategic alignment and adaptability will determine who thrives in this digital gold rush.
The Trump–Xi handshake in Busan may have paused the trade war, but the technology war, the one that will define power in the 21st century, has only just begun.

Sources

• Reuters
• The Economic Times