Sino-US economic ties to stay robust after recent summit, helping keep world trade buoyant  

While the US-China summit in mid-May yielded few fundamental solutions to political and diplomatic issues, economic and trade negotiations progressed toward managing existing conflicts more calmly.

During their meeting in Busan, South Korea in October 2025, the two leaders agreed to lower tensions over trade issues such as tariffs, rare earth elements, technology sanctions, and US agricultural products. While far from a complete resolution, the agreement indicated that the world's two largest economies had decided to maintain their trade relationship.

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Going forward, it is anticipated that there will be further "fine-tuning" to manage trade-related conflicts, following the summit last month.

The stances adopted by the two countries demonstrate the resilience of the global trade system. Although the globalization built over the past 35 years is showing signs of retreat, its pace is bound to be very slow.

Some 35 years ago, the collapse of the Soviet Union and the Eastern Bloc between 1989 and 1991 dramatically widened the reach of globalization, which had already been emerging in practice but remained geographically constrained. In its aftermath, globalization became truly global in scale and materially realized.

The timely introduction of the internet acted as a catalyst for this change. Trade and investment skyrocketed, and profits and desires seethed. This change was inclusive, not destructive. South Korea and China were among the largest beneficiaries of globalization, particularly through manufacturing-led integration into global value chains.

However, this order seems to be fracturing as signs of change emerge. A new wave of protectionism has emerged, fueled by discontent with globalization. The United States, which had been driving globalization, is withdrawing from international organizations. Above all, Russia and the US have been involved in military operations in other countries and the conflicts are reshaping global energy supply chains. Scholars observing these phenomena are labeling this era with terms such as decoupling, the New Cold War, and even the Pre-War Era.

But behind the simple names lie a complex reality. First, global trade continues to grow. In 2025, global trade increased by 7 percent, setting a new record high. Although trade between the US and China has decreased, China remains deeply integrated into global production and trade networks, including emerging value chains involving countries such as Vietnam and Mexico. As a result, despite US President Donald Trump raising tariffs, US imports and Chinese exports did not decline at all.

The nature of decoupling is also complex. The Biden administration had already conceptualized decoupling by mitigating it into "de-risking”. Consequently, while US sanctions against China are in effect in high-tech sectors like semiconductors, China's Haier is operating normally in the US in non-high-tech sectors like home appliances after acquiring GE's facilities. Tesla continues production in Shanghai, and while Apple is gradually increasing its production share in India, it still manufactures 80 percent of its iPhones in China.

In South Korea, which has established a value chain spanning the US and China, stock prices are also hitting record highs, driven by global semiconductor demands.

Court rulings nullifying tariff impositions are also acting as a brake on Trump's runaway policies. In February, US courts ruled that there was no legal basis for reciprocal tariffs, and in May, they ruled that there was none for universal tariffs either. Refunds for the reciprocal tariffs imposed so far have already begun

Ultimately, while the direction of change is clear, its nature is complex and its pace is slow. Globalization was driven not by political planning, but by corporations’ profit-seeking motives. The gift of "consumable high-tech products” such as the iPhone — which the US and China created together and presented to humanity — will continue to entice people with its powerful appeal. A policy that raises the price of the iPhone from $800 to $1,200 will not be popular. Changes that run counter to profit and desire are bound to be slow.

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It is also difficult for war to escalate. With the development of media, attacks causing mass destruction cannot be carried out recklessly. With improved living standards, complex supply chains cannot be easily disrupted. As low-cost asymmetric weapons such as drones emerge and the precision of medium-range missiles increases, traditional means of attack like aircraft carriers and tanks have become less decisive than before. Paradoxically, the two recent conflicts involving major powers strongly suggest that problems cannot be solved through force.

Even amid the noise of war, we must face the world's economic infrastructure squarely. This international order, in which we ourselves were the greatest beneficiaries, possesses considerable vitality. Political forces attempting to force choices based on partisan logic may emerge at any time, but we must not blindly follow their lead.

The author is a professor of Chinese trade and commerce at South Korea's Sejong University. 

The views do not necessarily reflect those of China Daily.