Singapore¡¯s top diplomat said U.S.-China tensions seem to be in a ¡°tactical pause¡± following a trade truce last month, warning of long-term partial decoupling if the economic giants fail to rebuild trust.

¡°The fundamental problem with the U.S. and China is almost complete lack of strategic trust,¡± Singaporean Foreign Minister Vivian Balakrishnan said Wednesday in an interview with Stephanie Flanders, Bloomberg¡¯s head of economics and government, at the New Economy Forum in Singapore.

¡°What you¡¯ve seen so far is not a strategic realignment,¡± he continued. ¡°Both sides have decided they need time. They need a tactical pause.¡±

The remarks underscore doubts over ties between the world¡¯s two biggest economies despite Chinese leader Xi Jinping and U.S. President Donald Trump reaching a trade truce last month following a pivotal meeting in South Korea.

While the one-year deal may serve to stabilize relations for a time, fundamental differences between them remain unresolved, with the agreement seen lacking the type of structural changes that Trump has long promised to address in the U.S.-China trading relationship.

Like many nations in Southeast Asia, Singapore navigates a delicate relationship between China, its biggest trading partner, and the U.S., a key security partner and its largest source of foreign direct investment.

Balakrishnan reiterated Wednesday that the U.S.¡¯s role in the world under Trump has shifted from being the system¡¯s ¡°underwriter and enforcer¡± to its ¡°disruptor-in-chief,¡± a change driven by long-term domestic political pressures and the economic stagnation of America¡¯s middle class.

To that end, he said, the U.S.¡¯s role as a benign hegemon that underwrote the global rules-based order for eight decades was historically unique and unprecedented.

¡°It¡¯s like an iceberg or a continental ice shelf falling,¡± Balakrishnan said. ¡°This is real geopolitical climate change.¡±

Trump has imposed new levies on dozens of nations since returning to office, seeking to rebalance global trade. Singapore has so far been hit with only a 10% tariff. But with trade amounting to about three times its gross domestic product, the city-state remains highly exposed to any sustained slowdown in global commerce.

The ¡°good news,¡± Balakrishnan said, is ¡°the majority of global GDP that still wants to operate on supply chain efficiencies,¡± the U.S. and China aside. ¡°So what you¡¯re watching now, all that scurrying around by medium and small economies, is to keep globalization alive.¡±