Plans for a high-stakes meeting between U.S. President Donald Trump and Chinese President Xi Jinping in South Korea later this month remain on track, even as trade tensions between the world’s two largest economies have escalated to new heights. According to U.S. Treasury Secretary Scott Bessent, the much-anticipated face-to-face at the Asia-Pacific Economic Cooperation (APEC) forum is still expected to take place, offering a glimmer of hope for de-escalation after a turbulent few weeks.
The recent flare-up began on October 9, 2025, when China announced expanded export controls on rare earth minerals—materials crucial for manufacturing everything from electric vehicles and smartphones to sophisticated military equipment. The move sent shockwaves through global supply chains, given China’s near-monopoly on these resources. The U.S. defense industry, in particular, relies heavily on Chinese rare earths, making the Chinese decision a potent bargaining chip in the ongoing trade dispute.
President Trump responded swiftly, announcing an additional 100 percent tariff on Chinese goods, set to take effect on November 1. The market, already jittery from months of tariff threats and countermeasures, reacted with a sharp sell-off. But Treasury Secretary Bessent, speaking to Fox Business Network, sought to calm nerves, emphasizing that communication between the two sides had not broken down entirely. "The relationship, despite this announcement last week, is good. Lines of communication have reopened, so we’ll see where it goes," Bessent said. He added, "The 100 percent tariff does not have to happen if the two sides work out their disagreements in negotiations."
Echoing this cautiously optimistic tone, Trump himself took to Truth Social on October 13 to reassure both markets and the public. "Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The USA wants to help China, not hurt it!!!" Trump wrote, signaling his intent to avoid an all-out trade war if possible.
Despite the conciliatory rhetoric, U.S. officials have not shied away from criticizing China’s latest actions. Bessent described the new export controls as a direct threat to global industry, stating, "They have pointed a bazooka at the supply chains and the industrial base of the entire free world. And, you know, we’re not going to have it. China is a command and control economy. They are neither going to command [nor] control us." He further revealed that the U.S. was actively coordinating with allies in Europe, India, and Asia to push back against what Washington sees as Beijing’s attempt to weaponize its dominance in rare earths.
China, for its part, has defended its decision, framing the export restrictions as a necessary response to what it calls "provocative and damaging" U.S. measures. According to China’s Ministry of Commerce, the heightened controls were introduced after a string of U.S. actions since trade talks in Madrid last month, including the blacklisting of Chinese firms and the imposition of new port fees on China-linked ships. Beijing has accused Washington of double standards, arguing that the U.S. cannot seek dialogue while simultaneously threatening further economic penalties.
In a statement, China’s Commerce Ministry confirmed that it had informed Washington in advance about the export measures but insisted, "The U.S. cannot seek dialogue while issuing new threats." The ministry’s stance reflects the deep mistrust that continues to cloud negotiations, even as both sides publicly express a willingness to return to the table.
Behind the scenes, there have been signs of progress. Bessent and his counterpart, Treasury Secretary Scott Busant (as reported by Khaama Press), both noted that working-level meetings between American and Chinese officials took place in Washington during the week of October 14, coinciding with major gatherings at the IMF and World Bank. These staff-level talks are seen as critical for laying the groundwork ahead of the Trump–Xi summit in South Korea.
"Communication channels are open again, and we’re working to rebuild trust," Busant said, reinforcing the message that dialogue has not collapsed. He also stressed that "the tariffs are not inevitable," leaving the door open for a negotiated settlement that could avert further escalation.
The markets have responded positively, at least for now. Asian stocks edged higher on October 14 following Busant’s comments, and Wall Street rebounded 2.2% after a volatile week triggered by tariff uncertainty. Analysts say that the prospect of a direct Trump–Xi meeting has helped ease immediate fears of a deeper trade confrontation, though they caution that core disputes over technology access and export dominance remain unresolved.
Bessent, while hopeful, did not mince words about the stakes. “We’re not going to accept any licensing system imposed by Beijing,” he said, reiterating U.S. opposition to China’s demand that foreign companies obtain approval and disclose intended uses for products containing Chinese rare earths. The U.S. position is buttressed by support from its allies, with Bessent confirming ongoing talks with European and Asian partners to counter China’s market control.
Economists warn, however, that the situation remains precarious. Any breakdown in dialogue could quickly reignite global market instability, especially as the APEC summit in South Korea draws near. The world is watching closely, with the outcome likely to shape not just U.S.–China relations, but the broader trajectory of global trade for years to come.
Despite the uncertainty, the scheduled meeting between Trump and Xi stands as a rare point of hope. As Bessent put it, "He [Trump] will be meeting with [Communist] Party Chair Xi in Korea. I believe that meeting will still be on." If successful, the summit could mark a turning point—however fragile—in a trade saga that has kept governments, businesses, and investors on edge for much of the year.
For now, all eyes are on South Korea, where the world’s two most powerful leaders will attempt to bridge a divide that has proven stubbornly resistant to easy solutions. Whether they can do so, and what that means for the global economy, remains to be seen—but the stakes, as everyone agrees, could hardly be higher.
