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chairman donald trump Preparations are underway to meet face to face with the Chinese leader Xi Jinping Thursday is a chance for the leaders of the world’s two largest economies to stabilize relations after months of turmoil over trade issues.
Trump has used tariffs aggressively since returning to the White House for a second term ChinaThe range of retaliatory measures on exports of rare earth elements has given new urgency to the meeting. There is mutual recognition that neither side wants to risk disrupting the world economy in a way that jeopardizes their own country’s fortunes.
In the days before the meeting, US officials have signaled that Trump does not intend to cash in on a recent threat to impose additional 100% import taxes on Chinese goods – and China has signaled it is also prepared to relax its export controls on rare earths and buy soybeans from the US.
Trump boarded Air Force One en route to South Korea and told reporters he might ease tariffs related to China’s role in manufacturing fentanyl earlier this year.
“I look forward to getting them down because I believe they will help us deal with the fentanyl situation,” Trump said. He later said, “Relations with China are very good.”
The meeting is scheduled to begin at 11 a.m. (8 p.m. ET) in Busan, South Korea, a port city about 76 kilometers (47 miles) south of Gyeongju, the main venue of the Asia-Pacific Economic Cooperation summit.
At a dinner with other APEC leaders on Wednesday night, Trump was caught on a microphone saying the meeting with Xi would be “three, four hours” and then he would go home to Washington.
Officials from both countries met in Kuala Lumpur earlier this week to lay the groundwork for their leaders. Subsequently, China’s top trade negotiator Li Chenggang said they had reached a “preliminary consensus”, a statement confirmed by the US Treasury Secretary. Scott Besant who said it was “a very successful outline.”
The anticipated detention has brought a sense of relief to investors and businesses stuck between the two countries. The US stock market has risen on the expectation that the trade outline will be revealed from the meeting.
No matter how cordial the rhetoric, Trump and Xi remain on a potential collision course as their countries compete to dominate manufacturing, develop emerging technologies such as artificial intelligence and shape world affairs such as Russia’s war stance in Ukraine. Trump indicated he had no plans to raise issues such as Taiwan’s security with Xi.
“The proposed deal on the table fits the pattern we’ve seen all year: short-term stabilization dressed up as strategic progress,” said Craig Singleton, senior director of the China program at the Foundation for Defense of Democracies. “Both sides are managing instability, cooperating well enough to avert crisis while deep rivalries persist.”
The US and China have shown that they believe they have the levers to put pressure on each other, and the past year has demonstrated that tentative steps forward may be short-lived.
For Trump, that pressure comes from tariffs.
Currently, China faces a total of 30% new tariffs this year, 20% of which are related to its role in fentanyl production. But the tariff rates have been unstable. In April, he announced plans to raise rates on Chinese goods to 145%, but he abandoned those plans when the market collapsed.
Then, earlier this month, ahead of this meeting with Xi, Trump threatened to impose 100% import taxes because of China’s rare earth sanctions.
Xi has a stranglehold on the world economy because China is the top producer and processor of rare earth minerals needed to make fighter jets, robots, electric vehicles and other high-tech products.
China tightened export restrictions on October 9, just before the Trump-Xi meeting, repeating a cycle in which each nation jockeys for the lead and then backs off after more trade talks.
It may also matter what happens directly after their conversation. Trump plans to return to Washington, while Xi plans to stay in South Korea to meet with regional leaders during the Asia-Pacific Economic Cooperation summit, which officially begins on Friday.
“Xi sees an opportunity to establish China as a reliable partner and strengthen bilateral and multilateral ties with countries frustrated by the US administration’s tariff policy,” said Jay Trousdale, CEO of risk and intelligence consulting firm TD International and a former State Department official.
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Bok reported from Tokyo.