President Donald Trump arrived in Gyeongju, South Korea, on Wednesday with renewed optimism. He declared that a long-awaited breakthrough in U.S.-China trade relations could finally be within reach. Speaking before business leaders at the Asia-Pacific Economic Cooperation (APEC) summit, Trump said he was “confident” of securing a deal with Chinese President Xi Jinping during their highly anticipated bilateral meeting on Thursday. The potential agreement, according to officials, could mark the most significant easing of trade tensions between the two economic superpowers since the beginning of Trump’s second term. By 2025, this could culminate in a historic Trump-Xi trade deal.
Trade Tensions Give Way to Strategic Negotiations
At the core of the discussions is the possibility of reducing the 20% U.S. tariff on Chinese imports. This would be in exchange for Beijing’s commitment to curb exports of chemicals used in producing fentanyl — a synthetic opioid that continues to drive the U.S. overdose crisis. The proposed move would represent a rare alignment of economic and public health interests between the two rivals. Trump noted that cooperation from China on fentanyl could “save tens of thousands of American lives.” It would also ease pressure on global supply chains that have been strained by years of escalating tariffs and restrictions. If successful, this Trump-Xi negotiation could set a foundation for a comprehensive trade deal by 2025. Negotiators from both countries met in Malaysia earlier this week to lay the groundwork for the new framework. This could include China resuming purchases of American soybeans. Additionally, they may delay its planned restrictions on rare earth exports — a critical step for stabilizing the global electronics market.
Tariffs, Rare Earths, and Global Supply Chains
The White House’s trade proposal reportedly includes an offer to suspend a planned 100% tariff hike on Chinese goods. This would happen if Beijing agrees to open its markets to U.S. agricultural exports and limits its control over rare earth elements. These materials are essential for manufacturing semiconductors, batteries, and advanced defense technology. They have become a strategic flashpoint in global commerce. Economists warn that ongoing tit-for-tat measures could further fragment international trade. This would push manufacturing costs higher and slow innovation. As one senior Treasury official explained, “China’s rare earth controls are a bazooka aimed at the world’s industrial base, and we cannot allow that to continue unchecked.” The statement underscores Washington’s growing concern. The competition between the U.S. and China is evolving into a systemic economic standoff. It threatens to reshape global production chains. Expectations are high for a potential Trump Xi trade breakthrough by 2025.
Meanwhile, Chinese economists have accused Washington of weaponizing tariffs and port fees. They claim it is a bid to isolate Beijing. In addition to the trade penalties, the U.S. has proposed new restrictions on software exports to China. They also suggested limiting Chinese air carriers’ access to trans-Russian flight routes. This measure would increase operating costs for Beijing’s airlines. Analysts note that both sides are under mounting pressure to reach a compromise before year’s end. The uncertainty surrounding trade has already shaved hundreds of billions of dollars off global market capitalization since 2024.
Expanding the Agenda: Beyond Trade
In addition to trade discussions, Trump has indicated plans to raise the issue of nuclear arms control with Xi. His eye is on incorporating China into future U.S.-Russia disarmament negotiations. The White House also hopes to leverage Beijing’s influence over North Korea amid reports of new missile tests from Pyongyang. South Korean President Lee Jae Myung met with Trump in Seoul prior to the APEC sessions. He welcomed Washington’s renewed diplomatic engagement. This could “open the door to a more stable Korean Peninsula.”
Trump’s comments highlight a broader strategic shift. His administration’s earlier focus was on confronting China’s economic dominance. The new approach emphasizes negotiation, mutual concessions, and pragmatic cooperation on shared threats such as narcotics trafficking and nuclear proliferation. Experts believe a successful deal would have far-reaching implications. It could potentially ease inflationary pressures in the U.S., revitalize agricultural exports, and restore some confidence in global markets.
Whether the two leaders can bridge their longstanding differences remains to be seen. However, for the first time in years, Washington and Beijing appear to be moving toward dialogue rather than division — a shift that could define the next chapter of global economic diplomacy. Such progress might eventually lead to the highly anticipated Trump-Xi trade deal in 2025.
