Global markets are holding their breath as U.S. President Donald Trump and Chinese President Xi Jinping prepare for their first in-person meeting since 2019.
This long-awaited meeting is taking place at the Asia-Pacific Economic Cooperation (APEC) Summit in Gyeongju, South Korea and could signal an ending point to the U.S.-China trade conflicts that have disrupted the world economy for several years.
After high-level talks last week in Kuala Lumpur at the ASEAN Summit, both nations remain hopeful that they will reach a new trade agreement that will stop the tariffs from increasing and give a sense of balance to global trade.
Let’s break down what’s happening, what’s at stake, and why this meeting matters more than ever for global markets, Asia, and South Korea.
1. The Background: Trade Tensions Reignited
The U.S. and China have been entangled in a trade war since 2018, marked by tariffs, export restrictions, and political rivalries. When Trump returned to the White House in early 2025, he revived his tough trade stance, threatening 100% tariffs on Chinese goods.
In response, Beijing announced new export restrictions on rare-earth minerals — critical materials used in electronics, defense systems, and electric vehicles. This created fresh uncertainty in the global supply chain, causing anxiety across tech and manufacturing sectors worldwide.
However, both sides seem to have realized that prolonged conflict benefits no one. That’s why recent developments signal a new willingness to compromise.
2. Breakthrough Talks in Malaysia
Over the weekend, top U.S. and Chinese trade negotiators met on the sidelines of the ASEAN Summit in Kuala Lumpur. The outcome? A new “framework agreement” that could set the stage for a broader trade pact to be finalized by Trump and Xi during their APEC meeting in Gyeongju.
U.S. Treasury Secretary Scott Bessent described the talks as “constructive and encouraging,” confirming that the U.S. would delay its planned tariff hikes while China agreed to pause its rare-earth export controls for one year.
According to Bessent, “We have a successful framework for the leaders to discuss in South Korea.”
Chinese Vice Premier He Lifeng, meanwhile, said that both sides had reached “a basic consensus” and would now begin internal approval procedures to finalize the deal.
3. What’s Inside the ‘Framework Deal’?
While the full details haven’t been released, several key points have been revealed by both governments:
- Tariff Pause: The U.S. will hold off on imposing the 100% tariffs that were set to begin on November 1.
- Rare Earths Export Delay: China will postpone its new licensing regime for rare-earth exports for one year.
- Agricultural Purchases: Beijing has agreed to resume large-scale purchases of U.S. soybeans and other farm products, a major win for American farmers.
- Tech and TikTok: Negotiations may also include discussions about TikTok’s continued operation in the U.S., according to Treasury officials.
- Future Trade Balance: Both nations aim to narrow their trade deficit and stabilize supply chains in sensitive sectors like semiconductors and AI technology.
In short, the deal represents a temporary truce with potential long-term impact.
4. Market Reactions: Asia Sees Early Gains
Global markets reacted positively to the news.
- Japan’s Nikkei 225 and South Korea’s KOSPI indexes jumped over 2%, reaching record highs.
- Hong Kong’s Hang Seng also rose nearly 1% amid optimism of easing tensions.
Investors view the potential deal as a signal of renewed stability after months of trade uncertainty. Economists say if the Trump-Xi meeting produces concrete results, global manufacturing and tech sectors could see a rapid recovery.
5. Why the APEC Meeting Matters
According to a recent poll conducted by The Korea Times, 30% of Koreans think Trump’s visit may relieve tensions regarding trade, and 27% believe this meeting could facilitate understanding about tariffs between Seoul and Washington.
However, some respondents did not see value in the meeting, as 18% stated that a meeting had little value because of the full APEC Economic Leaders’ Meeting in which Trump does not attend.
Anger or skepticism by conservatives, especially, was evident as they were reluctant to recognize liberal President Lee Jae Myung for hosting Trump. Nevertheless, there remains a general attitude in Korea that is cautiously optimistic that a dialogue between Trump and Xi could stabilize global markets and regional diplomacy.
6. Mixed Reactions in Korea
According to a recent poll conducted by The Korea Times, 30% of Koreans think Trump’s visit may relieve tensions regarding trade, and 27% believe this meeting could facilitate understanding about tariffs between Seoul and Washington.
However, some respondents did not see value in the meeting, as 18% stated that a meeting had little value because of the full APEC Economic Leaders’ Meeting in which Trump does not attend. Anger or skepticism by conservatives, especially, was evident as they were reluctant to recognize liberal President Lee Jae Myung for hosting Trump.
Nevertheless, there remains a general attitude in Korea that is cautiously optimistic that a dialogue between Trump and Xi could stabilize global markets and regional diplomacy.
7. What’s Next: The Gyeongju Showdown
On October 30, 2025 (Thursday), President Trump and President Xi will meet at the APEC Summit. Their discussion is expected to concentrate on trade, including custom arrangements and tariff agreements, as well as some sensitive items like techno-control over rare-earths, AI tech exports, and cooperating in manufacturing across the region.
According to analysts, if the deal proceeds to signing, it might be one of the largest shifts in trade policy since 2019 and may usher in a “Phase 2” trade agreement between Washington and Beijing.
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Conclusion
The world is paying attention as Trump and Xi prepare for perhaps the most significant summit in recent memory. Signs of progress and mutual concessions have already begun to surface. If confirmed at the APEC 2025 meeting in South Korea, we could be witnessing the dawn of a new phase in global trade diplomacy.
If the deal is successful, it could contribute to de-escalating tariff tensions, stabilizing global supply chains, and restoring confidence in world markets— an important and unique opportunity for cooperation amidst years of rivalry.
For now, however, all eyes are still fixing on Gyeongju, the host city for what will be a critical meeting to determine the next chapter of the U.S.-China trade story with two of some of the world’s most significant leaders.
