US President Donald Trump’s latest “deal” with China is doing more for Beijing than it is for Washington. In a bid to de-escalate a spiraling trade war, Trump agreed to halve a 20% fentanyl-related tariff and delay major sanctions on Chinese firms - while simultaneously raising tariffs on allies like Canada.The effect: China is walking away with cheaper access to US markets, looser restrictions on rare-earth exports, and less pressure to overhaul its manufacturing dominance - while American businesses and workers pay the price.Trump, Xi Defuse Tariff Time Bomb? U.S. & China Edge Towards Ending Trade War | Global PulseWhy it mattersBetween the linesDespite fiery rhetoric, Trump’s actions tell a different story.•Chinese goods now face lower or similar tariffs compared to imports from key US allies.•Beijing’s rare-earth chokehold remains intact, even as Trump touts “deals” to ease export restrictions.•The promise to decouple has, in practice, slowed: American businesses are hedging less, not more.“Contrary to what many in the administration are saying, they haven’t ended up with a tariff structure that really encourages relocation out of China,” Brad Setser of the Council on Foreign Relations told the NYT.In fact, as Sean Stein of the US-China Business Council puts it, the deal has only reaffirmed China’s place as the world’s factory: “In no place has it been possible to replicate the manufacturing ecosystem and cost efficiencies that you get in China.”The big pictureThis is not just about tariffs. It's about who sets the rules of global trade - and right now, China is taking control.1. China has mastered Trump’s playbook.From soybeans to semiconductors, Beijing has learned how to retaliate with precision.“We just won’t tolerate the US hitting us anymore, and we believe we have the capability to fight back,” Tu Xinquan, a Beijing trade expert, told the Economist.•When Trump threatened Chinese shipping with 100% tariffs, China imposed port fees of its own.•When the US sanctioned Chinese chipmakers, Beijing launched sweeping antitrust probes into Nvidia, Qualcomm, and others.•And when Trump leaned on tariffs to force fentanyl concessions, China offered limited cooperation in exchange for massive tariff relief.2. Rare earths are Beijing’s ace.China controls over 85% of the world’s refined rare earths - vital for everything from smartphones to fighter jets. Its recent licensing regime allows it to decide who can make what and where.Trump backed down from a 100% tariff after Beijing signaled it would stop shipments entirely - potentially paralyzing American auto and tech industries.3. Trump’s allies are getting punished.Trump imposed higher tariffs on Indian and Brazilian goods than on Chinese ones.Even Canada, America's closest ally, is facing a 35% nominal tariff - higher than China’s 10% fentanyl rate. Switzerland? Hit with 39%, mostly over gold imports. Meanwhile, China got relief in return for vague promises to buy soybeans and slow fentanyl exports.Zoom in: America’s broken tariff mathEven Britain and Australia - longtime US allies - are now hit with a 10% “reciprocal” tariff.This mishmash of penalties has created economic uncertainty that punishes friends more than foes and does little to reduce America's $300 billion trade deficit with China.The numbersHow China is winningPresident Xi Jinping has shown China can resist American coercion while answering in ways that deter escalation. China’s targeted responses-from export restrictions on critical inputs to countermeasures on shipping-have exposed the limits of sweeping US embargo threats that would also harm the American economy. Through trial and error, China is assembling a new framework for global trade that competes with tariff-centric strategies. It has redirected exports toward non-US markets while tightening control over chokepoint industries such as rare earths, using licensing-style leverage reminiscent of America’s semiconductor oversight-but sharper. As the largest trading partner for dozens of countries, China is using its manufacturing depth and market reach to set de facto rules that others must navigate, a report in the Economist said.Rather than weakening the leadership, the trade war has galvanized support for Xi Jinping’s push to insulate critical supply chains and accelerate advanced manufacturing. Despite formidable internal challenges-from property-sector strain to subdued consumption-the confrontation has validated a long-running plan to become a techno-industrial powerhouse, the Economist report said.What they’re sayingWhat’s nextThe tariff ceasefire is temporary. The rare-earth reprieve is for one year. Trump has hinted he’ll reimpose tariffs or add software export bans if China doesn't “keep its promises.”Trump is also expected to meet with Xi Jinping in China early next year. Analysts warn that without a durable framework, the trade rollercoaster could lurch into another round of escalation.The bottom line(With inputs from agencies)