US President Donald Trump and Chinese leader
Xi Jinping are set to meet in Busan on Thursday, marking their first encounter since 2019 and one of the most closely watched diplomatic moments of Trump’s second term. The talks taking place on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit come amid a fraught atmosphere of trade tariffs, tech restrictions and geopolitical friction that have defined the renewed US-China rivalry.
Both sides have signalled cautious optimism but deep mistrust remains. The agenda spans across various flashpoints from rare earths and fentanyl tariffs to Taiwan, the war in Ukraine and the future of TikTok each carrying implications far beyond the negotiating table.
Rare earths, fentanyl and soybeans at the core of talks
The meeting will see Trump and Xi attempt to chart a course through a tangle of disputes that have strained the relationship between Washington and Beijing. Rare earths, a strategic sector dominated by China and vital to defence, automotive and electronics manufacturing, are expected to feature prominently. Beijing imposed sweeping export controls on the materials earlier this month, prompting Trump to announce retaliatory tariffs of 100 per cent on Chinese goods, a move that risked reigniting a tit-for-tat trade spiral.
Trump has since moderated his stance, admitting such a tariff level is “not sustainable” and suggesting confidence that a deal could be reached. “We haven’t talked about the timing yet, but we’re gonna work out something,” he said, signalling the possibility of compromise.
The issue of fentanyl also looms large. Since March, a 20 per cent tariff on Chinese goods has remained in place over what Washington sees as Beijing’s failure to halt the trafficking of the deadly synthetic opioid into the United States. Trump said on Wednesday he expected to lower the tariff, citing improved cooperation. “I expect to be lowering that because I believe that they’re gonna help us with the fentanyl situation. They’re gonna be doing what they could do.”
China has rejected criticism that it has been complacent, insisting it has “provided help in this regard with positive results” and remains “open to continuing cooperation.” Foreign ministry spokesperson Guo Jiakun said the United States should “take concrete actions to create the necessary conditions for cooperation.”
Beijing’s response came as reports indicated that Washington may cut fentanyl-related tariffs in half in exchange for tighter controls on the export of precursor chemicals from China.
Geopolitics enters the trade arena
Beyond trade, the meeting carries geopolitical weight. Trump has said he plans to discuss the Russian invasion of Ukraine with Xi, as Washington presses major energy buyers including China to limit purchases of Russian oil, which the US and Kyiv argue are funding Moscow’s war machine.
China maintains it is a neutral party, though it has deepened its economic ties with Russia since the war began. Ukrainian President
Volodymyr Zelensky this week urged Trump to pressure Xi to cut support for Moscow.
In Taiwan, tensions remain high. Beijing regards the self-ruled island as part of its territory and has not ruled out using force to reunify it. The United States, while recognising only Beijing diplomatically, is bound by law to supply Taiwan with defensive arms.
US Secretary of State Marco Rubio reaffirmed Washington’s stance last weekend, saying the United States was not considering “walking away from Taiwan” in exchange for a China trade deal. Reports suggest Beijing wants Trump to explicitly declare opposition to Taiwanese independence, a request that could test the limits of compromise in Busan.
Tech wars and TikTok takeover
The technology front is another major battleground. Beijing wants the United States to ease export restrictions on advanced semiconductor chips, which are vital for artificial intelligence development. China has poured resources into expanding its chipmaking industry to overcome Washington’s curbs.
US chipmaker Nvidia’s CEO Jensen Huang recently warned that restricting chip sales to China could backfire, arguing Washington must “allow the sale of US-made AI chips in China” to maintain its global edge.
The social media platform TikTok also hangs in the balance. Washington has long accused its Chinese parent company, ByteDance, of posing national security risks. Trump signed an executive order last month approving the transfer of TikTok’s US operations to a consortium of American investors, many of them his allies. Bessent said the two leaders will “consummate that transaction on Thursday.”
Diplomatic theatre in Busan
The Busan meeting caps a three-nation Asia tour that has seen Trump lavishly received in Malaysia, Japan and South Korea. In Tokyo, Prime Minister Sanae Takaichi presented Trump with a gold-plated golf ball and said she would nominate him for the Nobel Peace Prize, while South Korean President Lee Jae Myung welcomed him with a military band rendition of “Y.M.C.A.” and gifted him a replica of an ancient golden crown. “It’s a great honour,” Trump quipped. “I’d like to wear it right now.”
The symbolic warmth contrasts sharply with the tensions at the negotiating table. Trump’s tariffs on Chinese goods, Beijing’s countermeasures, and the broader struggle for global technological dominance have strained ties to the limit. Yet both sides say the Busan talks could mark a turning point.
Guo Jiakun described the summit as a chance to “provide new guidance and inject new momentum for the stable development of China–US relations.” Trump echoed that optimism, telling business leaders on the APEC sidelines, “I think we’re going to have a great meeting, something very exciting for everybody.”
A test of will and vision
Negotiators from both sides say a framework deal is already in place, but the details will determine whether the truce holds. If successful, the Busan summit could ease pressure on US farmers, re-open high-tech trade channels, and stabilise global supply chains shaken by months of uncertainty.
But failure could plunge the two powers back into confrontation, a scenario that neither side, nor the world economy, can easily afford.