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Both parties intensified trade threats for leverage. The fentanyl issue remains a central focus for Trump during discussions. Tensions over Taiwan overshadow US-China talks.
President Donald Trump began a meeting with China’s leader, Xi Jinping, at a South Korean air base on Thursday, optimistic about reaching a trade ceasefire between the two largest economies. The negotiations in Busan, their first face-to-face encounter since 2019, conclude Trump’s quick Asia trip, where he announced several trade achievements with South Korea, Japan, and Southeast Asian countries.
“We’re going to have a very successful meeting, I have no doubt,” Trump said while shaking hands with Xi, who showed little emotion as Trump told reporters they might sign a trade agreement later that day. Xi reassured Trump through a translator that occasional frictions between the world’s top economies are normal.
Recently, trade negotiators from both nations reportedly reached a basic agreement on addressing each other’s primary concerns. Xi expressed his willingness to work with Trump to lay a solid foundation for China-U.S. relations.
The Chinese yuan surged to nearly a one-year high against the dollar amid hopes for easing trade tensions, which have shaken global markets, boosting stocks from Wall Street to Tokyo to record highs.
Trump has frequently expressed optimism about reaching an agreement with Xi since negotiators from both sides appeared to find common ground in Kuala Lumpur on Sunday. However, escalating economic and geopolitical competition, perceived by analysts as a new Cold War, raises doubts about the longevity of any trade thaw.
Tensions flared again this month after Beijing proposed significantly increasing restrictions on exports of rare-earth minerals crucial for high-tech industries, sectors where China holds dominance. Trump threatened to retaliate with 100% tariffs on Chinese exports and other measures, including limits on exports to China made with U.S. software, actions that could disrupt the global economy.
Before arriving in Busan, Trump announced, “The G2 will be convening shortly,” and mentioned that the U.S. would begin testing nuclear weapons again, citing China’s expanding arsenal.
The U.S. expects China to delay the implementation of strict rare-earth export controls for about a year and to resume purchasing U.S. soybeans vital to American farmers, as part of a substantial framework to be agreed upon by both leaders. Recently, China bought its first batch of U.S. soybeans in months, according to Reuters.
The White House anticipates multiple meetings between Trump and Xi over the next year, possibly including visits by each leader to the other country, signaling an expected prolonged negotiation process. Still, Trump seeks rapid progress to support global business interests.
He indicated that tariff reductions on Chinese goods could happen if China agrees to limit the flow of precursor chemicals that produce fentanyl, a dangerous synthetic opioid responsible for many U.S. overdose deaths. Trump also hinted at a possible agreement with Xi on TikTok, the social media platform facing a U.S. ban unless its Chinese owners sell off their U.S. operations.
Beijing is open to working together for positive results, according to Foreign Ministry spokesperson Guo Jiakun.
Existing deals, which significantly reduced retaliatory tariffs to approximately 55% on the U.S. side and 10% on China’s, and reauthorized trade in rare-earth magnets from China, are set to expire on November 10.
Bessent, the U.S. Treasury Secretary, expects China to delay export restrictions on rare-earths and to restart U.S. soybean purchases, crucial for American agriculture, as part of an overarching agreement. China’s recent soybean buys indicate movement toward warmer trade relations.
The White House views the summit as the beginning of several discussions between Trump and Xi, potentially involving visits between the leaders, hinting at ongoing negotiations. Trump aims for quick results, especially from a deal where the U.S. would ease tariffs if China curbs exports of chemicals used in fentanyl production.
He also mentioned the possibility of signing a deal with Xi over TikTok, which faces a U.S. ban unless Chinese owners sell their U.S. operations.
Prior agreements on tariffs and rare earths, crucial to the global supply chain, are nearing expiration. China has pushed for removing tariffs on fentanyl and easing export controls on U.S. technology, along with halting U.S. port fees aimed at countering China’s influence in global shipping.
This summit comes as Trump wraps up a five-day Asia trip, during which he signed agreements with Japan and Southeast Asian nations to counter China’s dominance in minerals essential for military and technological applications.
On the regional front, escalating tensions over Taiwan—an area China claims but where the U.S. maintains a strategic partnership—cast a shadow over the summit. Chinese military aircraft, including H-6K bombers, have recently conducted patrols near Taiwan.
U.S. Secretary of State Marco Rubio reassured that Taiwan should not worry about the talks, despite concerns that Trump might make concessions. U.S. law requires providing Taiwan with means to defend itself, heightening tensions amid China’s provocative military exercises near the island.
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