Introduction
In early 2026, the scene between Washington and Beijing appears to be walking two tightrope simultaneously: on the surface, there are signs of trade "cooling" after the October 2025 summit in South Korea, which ended with U.S. tariff cuts in exchange for Chinese fentanyl-related commitments, the return of agricultural purchases, and a temporary freeze on some "rare metals" restrictions for a year (Reuters, 2025).The escalation in technology, export controls, and supply chains continues, turning every trade item into a security test and every chip shipment into a deterrence message (Chatham House, 2025). It is this overlap that makes 2026 a confusing year: neither a declared "cold conflict" with stable rules, nor a complete truce that allows the global economy to catch its breath (Chatham House, 2025).
Paradoxically, both sides seem able to make "tactical deals" when their interests intersect, but at the same time they are re-engineering competition to rely less on direct tariffs and more on more blunt instruments: technological restrictions, the weaponization of supply chains, and the division of risk through economic alliances (IMF, 2025).Even the language of leaders reflects this trajectory; after the late 2025 contact, Washington spoke of progress and a "strong relationship" with reciprocal visits scheduled for 2026, while the technology issue remained outside the actual "de-escalation" (Reuters, 2025).
Hence, this analysis poses its central question: Is what we are witnessing in 2026 just a "trade truce" that temporarily reduces economic friction, or is it a redefinition of competition with new rules that differ from the last decade? To answer, we look at three interrelated fields: trade arrangements (tariffs, supply chains, alliances), diplomatic and commercial visits as a tool for managing differences and building trust, and technology as a field of conflict that integrates the economy with security and redraws the balance of deterrence and alliances.
First Axis - Trade Arrangements: From Tariff Warfare to Flexible Supply Chains
To understand 2026, it is necessary to return to the structure created by the tariff war of 2018: it was not just import taxes, but the beginning of a transition from "cooperative trade" to "trade as an instrument of power" (WTO, 2025). Before the tools changed, the scale of interdependence was large enough to make a break practically impossible; the United States alone estimated its total goods trade with China in 2024 at $582 billion, with a large goods deficit of approximately $295 billion.(U.S. Census Bureau, 2024). In subsequent years, both sides have gradually reduced the reliance on "explicit tariffs" as the sole driver of the dispute in favor of "indirect tariffs" in the form of investment restrictions, national security checks, export controls, and control of critical inputs such as chips and metals (IMF, 2025).
In 2025-2026, the "truce" appears in the form of time-bound agreements that do not eliminate competition but temporarily regulate it. For example, the "trade truce" that emerged from the October 30, 2025 summit, where Washington announced the reduction of its average tariffs on Chinese imports from about 57% to 47% as part of a package of arrangements, in parallel with a Chinese suspension of "rare metals" restrictions for a year, and addressing sensitive issues such as fentanyl and agricultural purchases (Reuters, 2025).A subsequent Chinese move underscored the "temporary contractual" nature of these arrangements: suspension of bans/restrictions on the export of dual-use items such as gallium, germanium, antimony, and ultra-hard materials to the US until November 27, 2026 (Reuters, 2026). This is not reconciliation, but conflict management through "calculated pauses" that prevent an all-out explosion and leave the door open for escalation if commitments falter.
But the most important shift in 2026 is not so much the text of the tariffs as what happens behind them: a shift towards "flexible" supply chains that avoid vulnerabilities, with a strong push for local production or within allied circles. In the Western literature this is referred to by concepts such as friendshoring and reshoring, a path that feeds on the conviction that "efficiency" is no longer the highest value if it leads to strategic blackmail (BIS, 2025).Reports on the global financial and trading environment speak clearly of rising uncertainty and increasing trade disruptions in a context of recurring geopolitical tension (WTO, 2025). At the center of this landscape are critical metals and rare earths: the G7 finance ministers meeting in Washington in mid-January 2026 to discuss "price floors" for rare metals reflects that the West is treating the chains as a national security issue, not just a market (Reuters, 2026).
For developing countries and the Middle East, this "soft landing" creates both opportunities and risks. Opportunities arise when companies seek to diversify suppliers: countries with intermediate industrial bases may attract part of the assembly lines or logistics and software services, provided stability and governance (World Bank, 2025).But the risk is that trade becomes more sensitive to political shocks, so that a single crisis in technology or metals could lead to price spikes and investment disruption. From an energy perspective, while China remains a central buyer of oil and gas, Washington is also increasingly concerned with "security of supply" in times of crisis, making energy markets more about alliances, corridors, and industrial policy decisions rather than demand alone (IEA, 2025).
Mutual visits: Diplomacy as a tool for rebuilding trust
If trade is the visible "language" of competition, visits and contacts are the channel through which risks are managed. In late 2025, diplomacy provided a clear example of this role: after the South Korea summit, a phone call between the two presidents ended with the announcement of reciprocal visits in 2026, including Trump's visit to Beijing in April and an invitation for a state visit later in the same year.On an analytical level, this kind of "summit scheduling" does not mean that differences have been resolved, but it does mean that both sides prefer to build mechanisms to avoid misunderstandings, especially when technology, cybersecurity, and regional tensions are factors that can produce rapid crises.
The first function is internal: each party needs to prove to its public that it is able to extract gains or prevent losses, which is why the truce was loaded with politically marketable titles such as protecting farmers, processing fentanyl, or ensuring the flow of critical minerals. The second function is negotiation: converting larger issues into small, implementable packages, because a "comprehensive agreement" has become too politically costly.Therefore, we see sharp differences between "strong declarations" and time-bound "implementation agreements"; the truce is managed as a contract with an expiration date, as Reuters noted that the "fragile dรฉtente" achieved in 2025 extends into 2026 but is not stable and may end in the second half of 2026 if not renewed or replaced by a stronger agreement.The third function is external: sending messages to third parties - allies, adversaries, and markets - that the conflict is manageable and that each side still holds the keys to global influence.
This third function becomes clearer if we look at Beijing's moves towards Europe in the first weeks of 2026. Irish Prime Minister Michel Martin's visit to Beijing was accompanied by explicit Chinese talk about the desire to strengthen cooperation with Ireland as a gateway to improving relations with the European Union, amid mutual trade tensions between Brussels and Beijing.This kind of "bilateral outreach within the European space" indicates a Chinese strategy to mitigate isolation through partial partnerships, just as Washington is doing by building economic security networks around metals and chips. On the other hand, the West's moves reveal a growing trend to "de-risk" supply chains - especially in critical raw materials - as seen in official European documents that talk about de-risking financing to build European value chains for critical materials.
In Asia, diplomacy remains tied to the deterrence equation. The South Korean president's visit to China in early January 2026, where he spoke of respecting "one China" while emphasizing that the alliance with Washington should not be understood as hostility to Beijing, illustrates how middle-power countries try to walk between the two poles, and how the US-China competition becomes a source of geopolitical pressure on allies.Even when these visits are not bilateral with Washington, they are part of the climate of competition: China wants to reassure its periphery that it is an economic partner, and the United States wants to reassure its allies that it will not compromise on technology and security.
Theme 3 - Technology: From an arena of competition to an arena of conflict and investment
In 2026, competition takes its "toughest" form in technology, because it mixes three things at once: production (chips, artificial intelligence, and communications), standards (who sets the rules of the market), and deterrence (preventing an adversary from acquiring decisive capabilities).For example, the United States replaced a system of broad exemptions for companies like Samsung and SK Hynix within China with a system of annual approvals through 2026 to import chip manufacturing equipment to its factories there, a move that reflects the continued systematic restriction of China's access to sensitive technology even when the doors are not completely closed.Restrictions on dual-use materials, metals and superhard materials are not just a "trade card" but the ability to disrupt Western value chains if the dispute escalates, as evidenced by the temporary suspension of these restrictions until late 2026 as part of a political bartering logic.
The result is that technology is no longer a sector within the economy, but a "superstructure" that rearranges the political economy of alliances: whoever owns the chips has the power of pressure, whoever owns the metals has the power of disruption, and whoever sets the standards owns the future. Here the question returns: Can a "trade truce" hold while technology turns into a permanent battleground that generates new deterrence rules every year?
Conclusion
What 2026 reveals is that the US-China relationship is not a pure cold truce, but a redefinition of competition managed through a constant tug-of-war between the desire for economic stability and the logic of technological deterrence and supply chain security.Appeasement agreements-such as tariff reductions and freezes on metal restrictions-seem like "safety valves" that prevent an explosion, but they do not address the root: the global economy has moved from an era of absolute efficiency to an era of "economic security" where every trade decision becomes a political message.
In other words, the debate is no longer about tariffs, but about supply chains, industrial investment, immunization technology, and visits as risk control mechanisms. The open question remains: Is 2026 a new chapter in a more organized competition between the two largest powers on earth, or just a "stopping point" before a new escalation that reshuffles alliances and doubles the cost of living in a fragmented world?
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