During my first few years in Beijing, APEC was hosted in the Chinese capital. It was referred to as “APEC Blue” because factories were closed around the city to ensure no pollution and blue skies for the cameras. I remember the lengths the country went to streets closed, skies cleared, every banner proclaiming Asia-Pacific cooperation. It felt grand, but few beyond China truly noticed. That was ten years ago.
Today, APEC has gone from fringe in geopolitical news articles to front page from a bureaucratic acronym to the most consequential gathering in world politics. Founded in 1989, the Asia-Pacific Economic Cooperation forum now represents 21 economies and 60% of global GDP. It’s the one platform that includes both the United States and China, the two powers now defining the century.
Today, over in Busan, South Korea, it became the stage for the world’s most anticipated meeting: Donald Trump versus Xi Jinping. This is no longer just for sinophiles or trade nerds, it’s defining the world stage.
What actually happened — The Trade outcomes
Clearly there is a lot more than just trade outcomes, but that will be our focus: “real action” on fentanyl, Donald Trump to China and Xi to Florida. For the international trading world, after months of tension, Xi and Trump struck a fragile but far-reaching trade truce during their four-hour APEC meeting in Seoul, one that could ease global supply-chain pressure and briefly steady markets.
Rare earths – the roadblock removed. China agreed to suspend its new export controls on rare-earth elements for one year, critical materials used in everything from EV batteries to defence technologies. In return, the US paused its “50% ownership” rule limiting tech exports to Chinese-linked firms. Trump called the breakthrough “a full settlement,” declaring, “That roadblock is gone now.”
The truth is that China is in the driving seat here. It’s not just about the raw critical minerals; it’s the refinement, the supply chain, and this all sits in China. Optimistically, they have controlled the world’s market; pessimistically, this is weaponised and they are in control.
The US will cut average tariffs on Chinese imports from 57% to 47%, including halving fentanyl-related tariffs from 20% to 10%, after Beijing pledged tougher enforcement on precursor chemicals. China’s commerce ministry confirmed reciprocal tariff suspensions and “adjusted countermeasures.” Both sides signalled a willingness to extend this framework annually, using it as a base for future talks. Trump described it as “a big step forward,” while Beijing emphasised “constructive progress in stabilising trade relations.”
So why does this all matter?
This is the meeting the entire world has been waiting for with bated breath. It’s not just about the US-China bilateral relationship, it could reshape trade routes, supply chains, and global market sentiment.
For decades, China’s leverage has been built not only on what it produces, but on its dominance in refining and logistics, the invisible backbone of modern industry. Many call it weaponised interdependence. The fact that Beijing agreed to reopen that tap, even temporarily, shows both how interlinked and how fragile the global system has become.
I have continuously pointed out that one in eight people live in the global West; seven in eight don’t. Seven billion people view the world differently, and 60% of global trade flows through APEC economies. What happens in Seoul reverberates everywhere.
So now for the Impact on the UK
For the UK, this summit is far from remote.
Politically, a thaw could buy London breathing space, allowing it to pursue its “pragmatic but principled” China policy, balancing engagement and security. A collapse, by contrast, would tighten US pressure on allies to align with Washington’s hawks, testing the UK’s diplomatic flexibility. In some ways, that’s still the case, wait until the announcement of approval for the new Chinese embassy in the UK.
Economically, British firms have a direct stake. The British Chambers of Commerce has warned that companies crave stability after years of tariff shocks. The one-year reprieve on rare earths offers relief for manufacturers, life-sciences firms, and clean-tech exporters, but another round of escalation would quickly undo that progress, fuelling costs and inflation across Europe.
Potential Scenarios for the UK
1. The ‘12 OUT OF 10 DEAL’ holds.
Tariffs stabilise, supply chains unclog, sterling strengthens. The UK doubles down on its CPTPP and Indo-Pacific partnerships, and China engagement, using the calm to expand market access.
2. The ‘12 OUT OF 10 DEAL’ fails.
Talks unravel, rare-earth exports are weaponised again, and tariffs return. The UK faces higher import costs, renewed inflation, and mounting pressure to side firmly with the US.
3. The ‘12 OUT OF 10 DEAL’ hides a grand bargain.
Xi uses this truce to pave the way for a 2026 Trump visit to Beijing, resetting trade rules. Trump looks to create a deal that only benefits the USA. Britain must respond through innovation, standards-setting, and digital-trade leadership.
A decade ago, APEC was a polite forum for trade ministers. In 2025, it is the crucible of global power politics. I would say for the UK we need to understand that the world is reorganising. Forums once seen as peripheral: APEC, ASEAN, BRICS are now rewriting the next chapter of global trade.
To stay competitive, the UK must engage, not observe; build, not react. Trade strategy × BCC network = exports. This week, the BCC took part in discussions on expanding UK–China trade in services, where the UK enjoys a £10bn annual surplus and strong advantages in finance, education, and professional services, a clear area for growth as the UK–China Trade in Services Working Group reconvenes next month.
Because what happened in Busan this week isn’t a footnote, it’s a turning point in global trade. The global economy has just shifted a few degrees and Britain’s ability to adapt may well define its next decade. A final note of caution, despite the warm optics, Beijing’s strategy remains unchanged. China still views Washington as unreliable and will double down on tech self-sufficiency, supply-chain dominance, and strategic leverage through rare earths… but it’s nice to have respite in US–China tensions for a moment in time.
Steven Lynch MBE is Director of International Trade at the British Chambers of Commerce and a former Managing Director of the British Chamber of Commerce in China