The recent meeting between US President Donald Trump and Chinese President Xi Jinping on the sidelines of the APEC Summit in Busan, South Korea, was, by all accounts, a significant event. Hailed as "amazing" and a "12 out of 10" by President Trump, the summit appears to have yielded a crucial, if tactical, trade truce - and perhaps something more.
Trump's use of the term "G2" to frame the gathering - implying a global co-management role for Washington and Beijing - has raised profound questions about the future architecture of international relations. Does it mark the dawning of "Chimerica", a powerful, bilateral condominium carving up the world?  
Trump, who tweeted (in his usual CAPSLOCK style) that "THE G2 WILL BE CONVENING SHORTLY!" before his meeting with Xi, enthusiastically posted after it: "Just wrapped up a HISTORIC G2 meeting with President Xi in Busan. 12/10. Tariffs down, soybeans up, fentanyl flow STOPPED. Peace through strength. America FIRST!"​ He added: "China understands now: we want fair trade, safe borders, and NO DRUGS. Great progress. Great respect. Great deal coming!"​ And he told his followers on Truth Social that "My G2 meeting with President Xi of China was a great one for both of our countries. This meeting will lead to everlasting peace and success. God bless both China and the USA!" 
​His Secretary of War, Pete Hegseth​, claimed that the relationship between the US and China "has never been better". He too went public on social media, announcing his "Positive meeting with Admiral Dong Jun, China's Defense Minister. We agreed: peace, stability, and good relations are the best path forward."​ and adding "Admiral Dong and I also agreed to set up military-to-military channels to deconflict and de​-escalate any problems that arise. Peace through strength!"
The three key takeaways from the Xi-Trump meeting were a partial trade truce, rare earth supply assurances, and a toned-down tariff regime. But the more consequential news was the American enthusiasm at the highest levels for a strategic reset with China.
The Trade Deal
First, on the volatile trade relationship. President Xi clearly emerged as the more confident player, having skilfully maximised China's economic and strategic advantages to secure significant wins. The key victories China secured included tariff relief (a reduction in existing levies and an agreement to hold off on imposing new ones) and export safeguards (the suspension of fees on Chinese vessels and, crucially, a pause on new US export controls that threatened to block more Chinese companies from accessing American technology). At the same time, the deal allowed President Trump to claim a win domestically, primarily by announcing the restart of Chinese purchases of US farm goods like soybeans. In essence, China had brilliantly allowed the US to declare victory simply by restoring the prior status quo, demonstrating President Xi's clear understanding of the domestic political requirements of his American counterpart.
This outcome highlights a crucial dynamic: China holds powerful, asymmetric leverage against the US - tools like its near-monopoly on rare earth minerals, which are indispensable for almost all modern, high-tech industry and could severely cripple US manufacturing, and its vast purchasing power over commodities such as American soybeans (as Indian policymakers realise, this sort of decisive economic clout is currently not available to India in its strategic dialogue with the US).
China's successful use of economic counter-pressure highlighted its capacity to deliver a powerful strategic message. Beijing can use its global supply chain dominance and its massive market size as effective weapons. In its official summary of President Xi's statements, Beijing framed the trade tensions as a crucial "lesson", implying that Washington should avoid a self-destructive cycle of mutual escalation.
China had the upper hand because the US lacked a cohesive, long-term strategic objective, instead relying on short-term tactical measures. While the US aim was purportedly to address fundamental, complex trade imbalances, China's response was described as a successful game of "Whack-A-Mole". Beijing's tactics forced the US administration to constantly shift focus - from soybeans to rare earths to technology companies - without ever resolving the core issues.
This successful demonstration of turning a perceived weakness (being the target of tariffs) into a strategic advantage showcases the high level of coordination in China's statecraft. It ultimately enables Beijing to shape the terms of engagement and remain magnanimous, having proven its ability to dictate the scope of the agreement.
Is Chimerica Dawning?
Second, the emergence of a US-China condominium. With the "G2" narrative, Trump, in his characteristic over-the-top style, has offered China a symbolic elevation, granting Beijing the appearance of equality in managing global affairs in exchange for economic concessions.  
The twin statements issued by Trump and Hegseth following the summit with Xi mark an extraordinary volte-face in the administration's China policy. Just a few years ago, and indeed until quite recently, the Trump doctrine treated China not merely as a competitor but as a strategic adversary to be confronted, contained, and, if necessary, defeated.
From the outset of his first term in 2017, Trump's rhetoric on China was laced with hostility. Beijing was accused of "ripping off" the United States, "stealing" intellectual property, manipulating its currency, and flooding American markets with cheap goods. The Covid-19 pandemic only intensified this antagonism, with Trump repeatedly referring to the coronavirus as the "China virus" and blaming Beijing for unleashing it on the world. The administration's posture hardened further during his second term, with tariffs, tech bans, and military posturing in the Indo-Pacific becoming hallmarks of a confrontational strategy.
"An Existential Threat"
This adversarial framing was not confined to political rhetoric. As recently as May this year, CIA Deputy Director Michael Ellis declared, "China is the existential threat to US security in a way that we really have never confronted before." That assessment reflected the prevailing consensus within the national security establishment: that China's rise posed a systemic challenge to American primacy, demanding vigilance, decoupling, and deterrence.
Against this backdrop, the tone and content of the "G2 summit" communiqués are nothing short of astonishing. Trump's effusive praise of the meeting suggests not just a tactical pause but a rhetorical rehabilitation of China's global role. Hegseth's parallel statement, highlighting "positive" talks with the Chinese Defence Minister and the establishment of military-to-military deconfliction channels further underscores the shift from confrontation to coordination.
Why The Shift?
What explains this dramatic recalibration? Some observers still see it as a transactional pivot: a temporary thaw to stabilise markets, secure rare earth supplies, and reduce fentanyl inflows ahead of a volatile political season. Others interpret it as a strategic recalibration, acknowledging that unrelenting hostility toward China has yielded diminishing returns and heightened global instability.
Whatever the rationale, the implications are profound. If China is no longer cast as an existential threat but as a partner in peace and trade, then the entire scaffolding of Trump-era foreign policy begins to wobble. Allies who aligned with Washington's hard line may now find themselves adrift. Domestic constituencies primed for confrontation may feel betrayed. And Beijing, long accustomed to American unpredictability, may see this as an opportunity to recast itself as a responsible stakeholder - without conceding on core issues like Taiwan, the South China Sea, or technological self-sufficiency.
For India, the message is mixed. On one hand, a cooling of US-China tensions may reduce regional volatility and open space for economic recalibration. On the other, it may signal a return to great-power accommodation that sidelines regional or "middle" powers like the EU, India and Russia. New Delhi, which has invested in strategic convergence with Washington partly on the basis of shared concerns about Beijing, will need to watch closely whether this G2 détente is fleeting, or the start of a new equilibrium.
The Challenge Is For The Others
In either case, the transformation from "China is the enemy" to "God bless both China and the USA" is not just a shift in tone - it is a reminder that in Trumpian geopolitics, today's existential threat can become tomorrow's indispensable partner. The challenge for allies and adversaries alike is to discern whether this is a tactical feint or a strategic reset.
"Chimerica", the term coined (by historian Niall Ferguson) to describe the symbiotic economic relationship between the two giants in the pre-trade war era, suggests deep, structural interdependence and shared strategic vision about everything from geopolitics to global macro-economics. The current relationship, even after Busan, instead remains defined by deep-seated strategic competition. Core issues - China's industrial policies, intellectual property rights, technological rivalry, and geopolitical tensions over Taiwan and the South China Sea - remain fundamentally unresolved. The underlying rivalry for global technological and geopolitical supremacy persists. China's vision of development, as Xi Jinping stated, may not "contradict" Trump's "Make America Great Again", but it certainly challenges the core of American global primacy.
And yet, it may be too early to come to such a complacent conclusion. There are growing signs that the US may be reorienting its strategic worldview toward a hemispheric focus - prioritising homeland security, border control, and dominance in the Americas - while tacitly conceding greater influence to China in the Indo-Pacific under a loose "G-2" framework. Such a shift would mark a return to spheres-of-influence thinking, with Washington seeking stability through selective engagement rather than global primacy.
To sum up: the idea of a G2 condominium carving the world into spheres of influence is undermined by the persistence of the New Cold War's structural faultlines - unless Trump is in the process of redrawing those faultlines and ending the strategic competition we all took for granted.
(Shashi Tharoor has been a Member of Parliament from Thiruvananthapuram, Kerala, since 2009. He is an author and a former diplomat)
Disclaimer: These are the personal opinions of the author
