The meeting between U.S. President Donald Trump and Chinese President Xi Jinping in Busan, South Korea—held after a six-year gap—appears to have produced positive outcomes, paving the way for renewed trade relations between the two nations. Following the talks, Trump immediately announced a 10 percent reduction in tariffs on Chinese goods, lowering them from 57 percent to 47 percent—below the 50 percent tariff currently applied to India. In response, China agreed to resume exports of rare earth metals to the U.S. and committed to purchasing substantial quantities of American soybeans. The two leaders also discussed cooperation in energy and other key areas. Trump indicated that a comprehensive trade agreement with China could be finalized soon. However, in analyzing who gained the upper hand from the meeting, it appears that China emerged stronger. Trump, visibly frustrated with India for its large-scale imports of Russian crude oil, notably avoided discussing crude oil with Xi—even though China remains the largest global buyer of Russian oil. Xi’s calm and measured response following the talks contrasted sharply with Trump’s exuberant declaration that he would rate the meeting “12 out of 10,” suggesting that Trump may be under mounting pressure and that his negotiating position is weakening. In a positive development for India, Trump has granted a six-month exemption from U.S. sanctions for the Chabahar Port project in Iran—a vital trade link for India that provides direct access to Afghanistan and Central Asia while bypassing Pakistan. Trump’s recent statements about India and Prime Minister Modi have been contradictory. At times, he calls Modi a friend, an outstanding leader, and even a father figure—yet he also delivers sharp and critical remarks, reflecting inconsistency in his diplomatic approach.
Now the question arises whether the US-China trade deal will bring relief to India or increase its problems. Several challenges are looming for India, which could exacerbate India’s problems. China leads in exports to the US, followed by India and other countries. Due to the trade war between the US and China, American companies began importing from countries like India and Vietnam instead of China. India was benefiting the most from this, but now, with China imposing lower tariffs than India, American companies may again turn to China. In 2024, China supplied goods worth approximately $438.7 billion to the United States, while India supplied goods worth approximately $79.44 billion to the US. India supplies a variety of products to China, including peanuts, chilies, grains, and soybeans. According to a report, India’s agricultural products to China were worth approximately $14.9 billion, but now China has assured the US of purchasing large quantities of soybeans. In such a situation, it is possible that China may import more agricultural products from America, due to which the supply of agricultural products from India may decrease. Due to the deal, relations between America and China are improving. In such a situation, American companies moving out of China, which has been going on for the last several years, may change their plans. After China, India is the first choice of American companies, due to which India’s manufacturing sector may suffer. Apart from this, there may be pressure on India’s electronics, textile and auto parts sectors.
The Indian stock market could also suffer. Foreign investors may be attracted to invest in both China and the US. Soybean farming has been a major headache for Trump. China was the largest market for American soybean farmers. China used to buy approximately $13 billion worth of soybeans. After the tariff war began, China stopped soybean purchases, causing losses to soybean farmers. Regarding rare earth minerals, they are a group of 17 special metals used in everything from electronics to defense equipment, batteries, semi-conductors, missiles, radar systems, drones, jet engines, smartphones, laptops, and even electric vehicles. The disruption in the supply of these metals was impacting the US. In short, both countries have achieved their desired goals. Both have adopted strategies based on their own interests. Now, it remains to be seen under what terms the India-US trade deal will be reached. One thing is clear: whether it is the US or another country. In today’s world no one can clap with one hand.
