Dear Focus Reader,

Last week's meeting between Presidents Trump and Xi in Busan illustrated the delicate balance both sides are pursuing: reducing tensions in trade and technology while contending with enduring economic and regional rivalries.

As part of the deal to reduce tensions, the U.S. paused port fees and crane tariffs on China-linked vessels for one year, providing roughly $3.2 billion in relief. The move has coincided with limited Chinese purchases of U.S. farm goods, including wheat, though some retaliatory tariffs, such as the 13% duty on soybeans, remain in place. Both sides have also proposed fresh negotiations on shipbuilding and maritime logistics, signaling a willingness to manage tensions around structural trade issues. And despite the recent tariff truce, Chinese exports fell for the first time in nearly two years as global demand softened.

China also took a major step in its naval modernization, recently commissioning the Fujian, its largest and most advanced domestically built aircraft carrier. The vessel features an electromagnetic catapult system and new carrier-based jets, enhancing China's operational reach across the Pacific and drawing close attention from regional neighbors. Analysts note that the carrier could play a key role in regional contingencies, including Taiwan.

Meanwhile, technology remains a key area of U.S.–China engagement. Beijing has directed state-funded data centers to rely on domestically produced AI chips, while Washington eased certain export restrictions under the Busan deal. Even amid a trade thaw, these developments underscore that technological competition continues to shape the relationship.

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