Trump, Xi Jinping meet in Busan to ease trade tensions and discuss tariff

President Donald Trump is meeting facetoface with Chinese leader Xi Jinping on Thursday a chance for the leaders of the worlds two largest economies to stabilize relations after months of turmoil over trade issuesTrumps aggressive use of tariffs since returning to the White House for a second term combined with Chinas retaliatory limits on exports of rare earth elements have given the meeting newfound urgency There is a mutual recognition that neither side wants to risk blowing up the world economy in ways that could jeopardize their own countrys fortunesIn the days leading up to the meeting US officials have signalled that Trump does not intend to make good on a recent threat to impose an additional 10037 import tax on Chinese goods and China has shown signs it is willing to relax its export controls on rare earths and also buy soybeans from AmericaTrump went further aboard Air Force One on his way to South Korea telling reporters he may reduce tariffs that he placed on China earlier this year related to its role in making fentanyl I expect to be lowering that because I believe that theyre going to help us with the fentanyl situation Trump said later adding The relationship with China is very goodShortly before the meeting on Thursday Trump posted on Truth Social that the meeting would be the G2 a recognition of America and Chinas status as the worlds biggest economies The Group of Seven and Group of 20 are other forums of industrialized nationsBut while those summits often happen at luxury spaces this meeting is taking place in humbler settings Trump and Xi will be talking in a small gray building with a blue roof on a military base adjacent to Busans international airportThe meeting began roughly at 11 am 10 pm ET in Busan South Korea a port city about 76 kilometres south from Gyeongju the main venue for the AsiaPacific Economic Cooperation summit Trumps helicopter landed at 1017 am local time with an Air China plane rolling on the tarmac about 10 minutes later Before Trump and Xi appeared for a handshake to formally start the meeting there was a chaotic series of exchanges among US and Chinese officials about how to stage the meetingWere going to have a very successful meeting I have no doubt Trump said as they shook hands The US president added Xi is a very tough negotiator with Trump saying they could sign a deal but they have a great understanding of each other When the two were seated Xi read prepared remarks that stressed a willingness to work together despite differencesGiven our different national conditions we do not always see eye to eye with each other he said through a translator It is normal for the two leading economies of the world to have frictions now and thenAt a dinner on Wednesday night with other APEC leaders Trump was caught on a microphone saying the meeting with Xi would be three four hours and he would then go home to WashingtonOfficials from both countries met earlier this week in Kuala Lumpur to lay the groundwork for their leaders Afterward Chinas top trade negotiator Li Chenggang said they had reached a preliminary consensus a statement affirmed by US Treasury Secretary Scott Bessent who said there was a very successful frameworkThe anticipated detente has given investors and businesses caught between the two nations a sense of relief The US stock market has climbed on the hopes of a trade framework coming out of the meetingHowever cordial the rhetoric Trump and Xi remain on a potential collision course as their countries vie to dominate manufacturing develop emerging technologies such as artificial intelligence and shape world affairs such as the status of Russias war in Ukraine Trump indicated that he did not plan to bring up issues such as the security of Taiwan with XiThe proposed deal on the table fits the pattern weve seen all year shortterm 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 volatility calibrating just enough cooperation to avert crisis while the deeper rivalry enduresThe US and China have each shown they believe they have levers to pressure the other and the past year has demonstrated that tentative steps forward can be shortlived For Trump that pressure comes from tariffsRight now China had faced new tariffs this year totalling 30 per cent of which 20 per cent has been tied to its role in fentanyl production But the tariff rates have been volatile In April he announced plans to jack the rate on Chinese goods to 145 per cent only to abandon those plans as markets recoiledThen on October 10 Trump threatened a 100 per cent import tax because of Chinas rare earth restrictions Xi has his own chokehold on the world economy because China is the top producer and processor of the rare earth minerals needed to make fighter jets robots electric vehicles and other hightech productsChina had tightened export restrictions on October 9 repeating a cycle in which each nation jockeys for an edge only to back down after more trade talks What might also matter is what happens directly after their talks Trump plans to return to Washington while Xi plans to stay on in South Korea to meet with regional leaders during the AsiaPacific Economic Cooperation summit which officially begins on FridayXi sees an opportunity to position China as a reliable partner and bolster bilateral and multilateral relations with countries frustrated by the US administrations tariff policy said Jay Truesdale a former State Department official who is CEO of TD International a risk and intelligence advisory firm