Xi strikes conciliatory tone as he meets Trump in South Korea

Chinese President Xi Jinping said Thursday that Beijing and Washington should be “partners and friends,” as his meeting with U.S. President Donald Trump on addressing trade and tariff concerns got underway.

This is the first time the two leaders are meeting in person since Trump began his second term in January. 

“We are gonna have a very successful meeting,” Trump said at the photo-op with Xi before walking into the meeting. While calling Xi “a very tough negotiator,” Trump played up his ties with the Chinese leader, saying that “we’ve always had a very good relationship.”

When asked whether the two leaders would finalize a trade deal at the meeting, Trump said “could be. We’ll have a great understanding.”

In his opening remarks, Xi said it was “normal for the two leading economies of the world to have frictions now and then,” while urging both sides to work together and “ensure the steady sailing forward of the giant ship” of bilateral relations, according to a statement released by the Chinese foreign ministry.

Xi also lauded Trump’s efforts aimed at solving regional conflicts while stressing China’s role in promoting peace talks on various issues. The Trump administration earlier this month had hinted that China played a limited role in Thailand and Cambodia ceasefire talks.

“Although the meeting itself is not about peace, [Xi] is mostly trying to create an atmosphere conducive to a deal,” said Tianchen Xu, senior economist at the Economist Intelligence Unit.

The high-stakes meeting comes as tensions between the world’s two largest economies have been on the boil this year. The latest escalation came this month, with Beijing  export controls and Washington threatening to ban software-powered exports to China. 

The U.S. in recent days has shared details about deals they hope to achieve with China – from restricting the flow of fentanyl to the U.S. to TikTok’s divestiture from its Beijing-based parent ByteDance. Tariffs, tech curbs and rare earths are also on the table for discussion.

Beijing had been more circumspect about the prospects of an agreement, but in a possible sign of thawing relationship, China bought its first cargoes of U.S. soybeans in several months, Reuters reported Wednesday. 

The Trump-Xi meeting may be more of a “tactical pause than a strategic breakthrough” with both sides contesting with disagreements core to the U.S.-China rivalry, including technology controls, supply chain and security frictions, said Han Shen Lin, China director at advisory firm The Asia Group.

“A temporary truce is better than an uncontrolled trade war,” Lin added.

Xi is in South Korea – his first state visit in 11 years – from Thursday to Saturday to attend the APEC Economic Leaders’ Meeting in Gyeongju.

Shortly before the meeting started, Trump said in a post on Truth Social that he had instructed the Pentagon to restart nuclear weapons testing, claiming that the U.S. has the world’s largest nuclear arsenal, followed by Russia and China.

The remarks were “bold and disruptive,” Lin said, adding that Trump was “forcing the room to focus on U.S. leverage” ahead of the meeting. “If it lands a trade win, it’s genius; if it poisons the well, we’re in for frostier summits ahead.”

Investors are cautiously watching for headlines from Busan as the trade war between the U.S. and China has kept investors on edge. Global markets soared at the start of the week on growing optimism that the U.S. and China could near an agreement on trade.

“A return to dialogue and engagement — no matter the near-term results — is critical to moving the U.S.-China relationship forward in the long term,” said Curtis Chin, chair of senior fellows at the Milken Institute, also a former U.S. ambassador to the Asian Development Bank.

That said, “headline-making deals and meetings will need to be followed by well-executed implementation and fulfillment of commitments by both sides,” said Chin.