Xi and Trump Meet in Busan: A Step Toward G2 Cooperation

The recent meeting between Chinese President Xi Jinping and U.S. President Donald Trump in Busan, South Korea on October 30, 2023, has set the stage for potential new dynamics in international relations. While the encounter yielded few concrete agreements, it hinted at the possibility of a collaborative “Group of Two” (G2) approach, where both nations could work together on global issues while maintaining their competitive edge in other areas.

Mr. Trump characterized the first face-to-face meeting in six years as a “great success,” giving it a self-assessed score of “12 out of 10.” In reality, the discussions resulted in a modest agreement to ease some tariff tensions, particularly regarding fentanyl-related tariffs, which will decrease from 20 percent to 10 percent. This adjustment reduces the total combined tariff rate from 57 percent to 47 percent, still above pre-trade war levels. In return, Beijing committed to continuing rare earth exports under a one-year renewable arrangement and resuming purchases of U.S. soybeans.

Strategic Omission and Selective Cooperation

Notably absent from the discussions was the issue of Taiwan, a significant point of contention in U.S.-China relations and a potential flashpoint for conflict. This omission marks a departure from past summits, where Taiwan often dominated the agenda. Instead, the leaders reportedly focused on finding common ground regarding the ongoing conflict in Ukraine. Whether this pivot represents a pragmatic shift or a strategic ambiguity is yet to be determined, but it suggests the emergence of a selective cooperation model between the two countries.

Following the summit, Mr. Trump referred to the gathering as a “G2 meeting” on social media, expressing optimism for “everlasting peace and success.” Additionally, China’s Defense Minister Dong Jun later met with his U.S. counterpart, Pete Hegseth, reinforcing the sentiment of cooperation and the intention to manage military relations more effectively.

This nuanced outcome elevates the Busan meeting beyond a mere photo opportunity, hinting at a revival of the G2 concept—where the two largest economies collaborate on global governance while navigating their competitive relationship.

A Historical Context for G2 Dynamics

To appreciate the significance of this meeting, it is essential to consider the historical context of the G2 concept. The idea was first articulated by economist C Fred Bergsten in 2004, primarily as an economic framework. It gained traction during the global financial crisis of 2008, as China’s extensive stimulus measures helped stabilize not only its economy but also global demand, reinforcing its role as a key global player.

The U.S. viewed a G2 partnership as a means for China to take on greater responsibility in maintaining international stability. However, many Chinese officials were wary, perceiving the framework as a potential trap that could divert focus from domestic priorities and alienate developing nations.

As Xi Jinping took a more assertive diplomatic stance after 2012, the G2 concept faded, particularly as the U.S. shifted towards a policy of containment. The trade measures initiated by Mr. Trump in 2018 and the technological restrictions implemented under President Joe Biden were aimed at curtailing China’s growth. Ironically, these efforts mostly failed to contain China’s technological advancement, which has only increased its leverage over critical supply chains, including rare earth materials.

Beijing’s muted reaction to Trump’s G2 rhetoric suggests a cautious acceptance of the idea, aligning with Xi’s long-standing argument that the world can accommodate both nations as equals. This perspective diverges significantly from the hierarchical G2 envisioned by some in Washington years ago.

The potential for a new G2 framework, characterized by co-equality, faces significant challenges. While Mr. Trump has expressed a belief that the two nations “can together solve all of the problems of the world,” his unpredictable political style raises concerns about the sustainability of such cooperation. Underlying issues remain, including the persistent U.S. trade deficit with China, ongoing tech restrictions, and the sensitive topic of Taiwan.

Looking Ahead: The Future of U.S.-China Relations

Upcoming events may provide an opportunity for deeper engagement. Mr. Trump is scheduled to visit China in April 2026, with a possible reciprocal visit from Xi later that year. These meetings could pave the way for a more comprehensive agreement that solidifies G2 cooperation.

The absence of Taiwan from the Busan discussions could have been a tactical choice aimed at avoiding destabilizing the fragile dialogue. Alternatively, it may reflect a mutual decision to handle the issue through less public channels. Regardless, any successful G2 framework will likely be marked by volatility, characterized by ongoing friction and periodic resets.

Stabilizing U.S.-China relations while allowing for competition could yield benefits, especially for the Asia-Pacific region, where miscalculations could have dire consequences. Ultimately, even a fragile coexistence is preferable to unchecked antagonism, which can foster disorder and heighten the risk of misjudgments in a complex global landscape.