TrumpXi

United States President Donald Trump expects “a lot of problems” will be solved between Washington and Beijing when he meets China’s President Xi Jinping in South Korea for a high-stakes meeting on Thursday, amid growing trade tensions between the two.

Relations between the two world powers have been strained in recent years, with Washington and Beijing imposing tit-for-tat trade tariffs topping 100 percent against each other this year, the US restricting its exports of semiconductors vital for artificial intelligence (AI) development and Beijing restricting exports of critical rare-earth metals which are vital for the defence industry and also the development of AI, among other issues.

Officials from Washington and Beijing have been locked in trade talks since August to de-escalate trade tensions, and they also came up with a framework for a trade deal during meetings in Malaysia over the weekend.

On the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, South Korea, on Wednesday, Trump said an expected trade deal between China and the US would be good for both countries and “something very exciting for everybody”.

But only a meeting between Trump and Xi can confirm if a trade deal is really in the making.

Expectations for the agreement are modest, with analysts expecting the two world powers to continue to clash over their myriad differences long-term.

When are the two leaders meeting?

Trump is scheduled to meet Xi on Thursday in the port city of Busan in southeastern South Korea. The meeting is expected to start at 11am local time (01:00 GMT).

It will be the first time the leaders have met in person since Trump returned to the White House in January.

The US president last met Xi in 2019, during Trump’s first term, on the sidelines of the Group of 20 (G20) summit in Osaka, Japan.

“I think we’re going to have a great meeting with President Xi of China, and a lot of problems are going to be solved,” Trump told journalists on Wednesday on Air Force One while en route to South Korea.

On Wednesday, China’s Ministry of Foreign Affairs confirmed the meeting between Xi and Trump in a statement and said the leaders “will exchange views on bilateral relations and issues of mutual interest”.

What will Trump and Xi talk about?

Discussions are likely to cover:

• Trade tariffs
• Trafficking of fentanyl, a drug responsible for tens of thousands of deaths in the US each year
• China’s export controls on critical rare-earth metals and its purchase of US soya beans
• US export controls on semiconductors
• Geopolitical and security issues, particularly Russia’s war in Ukraine and Washington’s position on Taiwan
• Port fees on Chinese ships docking in US ports
• Finalising a deal to buy TikTok, the social media platform, from its Chinese owners

Alejandro Reyes, adjunct professor at the Department of Politics and Public Administration at the University of Hong Kong, told Al Jazeera that at this meeting, both sides will want to steady an uneasy rivalry – but for different reasons.

“For Washington, the goal is to show that its tough line on China has delivered results. The Trump team is walking into this summit after signing trade pacts with Malaysia, Cambodia and Japan that link market access directly to national security cooperation. These deals require America’s partners to align with US export controls and supply-chain rules – essentially making ‘economic security’ a shared obligation,” he said.

“For Beijing, the priority is to project calm and endurance. The meeting comes just after the fourth plenum, which reaffirmed Chinese leader Xi Jinping’s authority and set the direction for the next five-year plan. China’s message is that it has weathered Western pressure and is back to focusing on growth and domestic stability,” he added.

But discussions on disputes over trade tariffs, critical rare-earth metals, AI technology and geopolitical strategies, the issues that most define the current relationship between the US and China, according to Reyes, are not going to be easy to resolve.

“The mistrust is structural now – it’s built into how both countries think about power and security,” he said.

What are the sticking points?

Fentanyl

A key issue for the Trump administration is stopping the illegal flow of drugs, particularly fentanyl – a powerful synthetic opiate which is 50 times more potent than heroin – from China to the US. In February, Trump slapped a 20 percent trade tariff on all imports from China, citing Beijing’s lack of effort in curbing the flow of the drug into the US.

In a media briefing note sent to Al Jazeera by the German Marshall Fund of the United States, Bonnie Glaser, managing director of GMF’s Indo-Pacific programme, said the fentanyl trade has been “a really contentious issue between the US and China”.

“From what I have heard, a criminal money-laundering cooperation supports the fentanyl trade, and this is where China is willing to cooperate, in a way where it will have minimum negative impact on their domestic situation,” she said at a briefing held in Washington, DC, on Tuesday.

Late on Tuesday, The Wall Street Journal reported that during Thursday’s meeting, “China is expected to commit to more controls on the export of so-called precursor chemicals used to make fentanyl.” The newspaper added that if this agreement is reached, Trump would reduce the tariffs imposed because of fentanyl by as much as 10 percent.

Trade tariffs

Following the fentanyl-related tariffs, in March, China imposed a 15 percent tariff on a range of US farm exports in retaliation, triggering a tit-for-tat tariff war.

In April, Trump raised tariffs on Chinese imports to 145 percent, prompting China to hit back with 125 percent tariffs of its own.

Washington and Beijing later cut tariffs to 30 percent and 10 percent, respectively, in May, and agreed to a 90-day truce in August for trade talks. The truce has been extended twice, but despite repeated talks, a trade agreement has not been reached.

Rare-earth metals and soya beans

China has restricted exports of 12 critical rare-earth metals this year, as well as of the machinery needed to refine these metals, citing security reasons. Beijing also said its restrictions were in response to US restrictions on the Chinese maritime, logistics and shipbuilding industries.

The first seven metals to be restricted were announced in April, while the remaining five were announced on October 10. These metals are crucial for the defence industry and for developing AI technology.

In October, Trump responded by threatening to impose 100 percent tariffs on China from November 1, citing Beijing’s strict export controls on critical rare earths as the reason for the tariffs.

Trump added that the US would also impose export controls on “any and all critical software”.

Reyes noted that while the US wants guaranteed access to rare earths and battery materials, it signed a new agreement with Japan and trade clauses with Malaysia this week, which aim to reduce the US dependence on China for these. “Beijing sees this as an effort to contain its influence,” he said.

Meanwhile, US Secretary of the Treasury Scott Bessent told many US media outlets this week that he expected China to defer its restrictions on rare earths and that Trump’s 100 percent tariff threat was “effectively off the table”.

Bessent added that the Chinese side would agree to increase purchases of US-grown soya beans.

Dylan Loh, associate professor in public policy and global affairs at Nanyang Technological University, said he anticipates some positive movement on solving these trade disputes but does not believe the fundamental economic tension between the US and China will be resolved at the meeting.

“The competition and mistrust go beyond simply economics,” he told Al Jazeera. “But the problems can be managed and must be managed well. It requires political capital and the ability to move beyond zero-sum thinking.”

Technology and TikTok

In September, Trump signed an executive order to transfer TikTok’s US assets to US investors, citing national security reasons. On Sunday, Bessent told US broadcaster CBS that the US and China had “reached a final deal on TikTok”, which will be finalised at the Trump-Xi meeting.

But, Reyes said, “the deal cools one dispute but doesn’t end the fight over chips, AI and digital control”.

In October, Washington blacklisted hundreds of Chinese tech firms, claiming they posed a risk to national security. The US has also restricted companies such as Nvidia from exporting advanced chips, important to manufacture key equipment used for the development of AI, to China, claiming that Beijing would use it to advance its global power.

Beijing has been irked by Washington’s restrictions and has launched antitrust investigations into Nvidia and Qualcomm, and has also increased its export controls on rare-earth elements.

Speaking to reporters on board Air Force One en route to South Korea on Wednesday, Trump said he might speak to Xi about Nvidia chips.

“I think we may be talking about that with President Xi,” Trump said.

Geopolitical Issues

According to analysts, Trump is eager to use this meeting with Xi to discuss ways to end Russia’s war in Ukraine.

Beijing, a close ally of Moscow, has said a prolonged war in Ukraine “serves no one’s interest”. But, in July, according to a report by The South China Morning Post, Chinese Foreign Minister Wang Yi told the European Union that it can’t afford to have Russia lose the war in Ukraine since the US would then turn its attention to China.

Trump has threatened to slap sanctions and tariffs on countries that buy Moscow’s crude oil in efforts to end the war. It has already imposed an additional 25 percent tariff – bringing the total to 50 percent – on India as a punishment for purchasing Russian oil.

But the US has not yet taken this step with China, which imports about 1.4 million barrels of Russian oil per day by sea.

According to a Reuters report, however, after the US sanctioned two of Moscow’s largest oil companies, Rosneft and Lukoil, in October, Chinese national oil companies like PetroChina and Sinopec have said they will refrain from importing seaborne Russian oil for the short term.

“Trump wants a ceasefire and a peace deal in Ukraine. Putin has been unwilling to play ball, and Trump, I think, intends to raise this with Xi Jinping, possibly ask him if he can reach out to Putin and encourage him to come to the negotiating table,” Glaser said.

“We know so far, Xi Jinping has been very, very cautious about getting involved. I think he will be reluctant to pressure Putin to do,” she added.

Besides Ukraine, Beijing will be eager to discuss the US position on Taiwan, according to Glaser.

“Xi Jinping will raise concerns about what Beijing views as the pro-independence policies of Taiwan’s President Lai Ching-te, and I think he will want clarification of the US stance and may well press Trump to say that the US opposes Taiwan independence and supports China’s unification,” she said.

“The bottom line is that Trump is not likely to abandon Taiwan because doing so could lead to a PRC [People’s Republic of China] decision to use force, and Trump wants to take credit for ending wars, not starting them,” Glaser added.

Trump, however, told journalists on board Air Force One on Wednesday that he was “not sure” he would discuss Taiwan.

How strong are their negotiating positions?

The balance of power in the respective negotiating positions of China and the US has shifted in the recent past.

Former US President Joe Biden restricted exports of US semiconductors, which are crucial for the development of AI, much to China’s annoyance. Then, early this year, Trump compounded this with 145 percent tariffs on Chinese goods.

China retaliated with 125 percent tariffs on US goods, escalating a trade war, until the two sides agreed in May to pause tariffs to allow for trade talks.

But that was not before China placed export restrictions on seven rare-earth metals in April. In October, China restricted exports of five more rare-earth metals, and Trump threatened 100 percent tariffs again in retaliation.

This week, seeking to diversify trade and its supply chains, China strengthened a trade deal with the Association of Southeast Asian Nations (ASEAN). But the US also drew up new trade agreements with Japan, Malaysia and Cambodia. On Wednesday, South Korea announced that it too had reached a trade agreement with the US, and was lowering tariffs on imported US goods.

According to Loh, it is unclear who has the upper hand right now between the US and China.

“While the signing of the FTA [with ASEAN] has certainly enhanced China’s position and influence and is indeed quite significant for ASEAN and China, it does not necessarily have a direct bearing on US-China itself,” Loh said.

“US retains considerable political and economic influence in this part of the world still, as evinced by Trump’s trip here,” he added.

According to Reyes, each side has different kinds of leverage.

“The United States has built a new network of allies who have literally signed on to Washington’s playbook,” he said, referring to the deal Washington signed with Malaysia, which obliges Kuala Lumpur to match US trade restrictions. Malaysia has clarified that this deal would only apply to matters of shared concern.

But Reyes said such a deal “gives Trump’s team political and legal momentum going into the China meeting”.

“China, though, has the economic stamina. It still anchors global manufacturing, dominates critical-mineral processing, and has proven that tariffs couldn’t break its model. China used the trade war to build muscles, resistance and resilience – it learned to do everything faster, cheaper and at scale,” he said.

“So the US has the ‘louder’ hand; China has the steadier one. Washington can escalate, but Beijing can outlast,” Reyes added.

So what is likely to come out of these talks?

The stakes are high with Trump announcing that he anticipates a “great” meeting. But expectations of any “great” outcome are low.

Reyes said he expects a truce in their strained ties with photo opportunities rather than any grand bargain.

“Expect both sides to announce small wins: a delay on tariffs, a joint statement on trade stability, maybe a working group on critical minerals cooperation,” he said.

“This summit won’t end the rivalry – it simply marks a new phase: the US building alliances through treaties, and China doing much the same, while consolidating power through endurance building. This meeting isn’t about ending the rivalry – it’s about learning to live with it,” he said.

Tensions between China and the US have escalated amid Donald Trump’s tariff threats and new restrictions on exports.

Published on 29/10/2025 – 11:09 GMT+1
•Updated
11:11

Nvidia shares continued their dramatic rise this week as investors banked on an easing of semiconductor trade restrictions between the US and China.

Ahead of a meeting with Chinese President Xi Jinping on Thursday, US President Donald Trump said he planned to discuss Nvidia’s advanced Blackwell artificial intelligence chip with Xi.

“We’ll be speaking about Blackwell, it’s the super duper chip,” he told reporters on Wednesday.

The president didn’t elaborate on specific policy aims, although he said he was “very optimistic” about the meeting with his Chinese counterpart.

By around 11:00 CET, Nvidia shares had jumped over 3% in pre-market trading, bringing the firm closer to a $5 trillion market capitalisation.

Semiconductors have been a key point of contention between the US and China as both nations seek to lead on advanced technologies such as AI.

The tiny chips, used to power a range of electronic devices from smartphones to medical equipment, are essential to this ambition. Since 2022, the US has therefore restricted Nvidia’s sales of advanced chips to China for national security reasons.

Trump has flip-flopped on export controls since his arrival in the White House, first restricting and then approving sales of Nvidia’s H20 AI chip to China. Nvidia designed the H20 specifically for the Chinese market to comply with Biden-era export curbs, although the Trump administration previously said it was concerned the tech could be used for military purposes.

With regard to the Blackwell processor, Trump suggested months ago that he would consider allowing Nvidia to export a downgraded version of the chip to China.

Progress on such a proposal would come as a relief to Nvidia CEO Jensen Huang, who has long criticised US restrictions. Huang has notably argued that such curbs are boosting China’s AI capabilities as the Chinese market is forced to become less reliant on US products.

It seems that such logic is already understood in Beijing, even as the US softens its stance. After Washington gave the green light to H20 exports, China’s regulator banned the country’s biggest tech companies from buying Nvidia’s artificial intelligence chips.

“The president has licensed us to ship to China, but China has blocked us from being able to ship to China,” Huang said at a Nvidia event this week in Washington. “They’ve made it very clear that they don’t want Nvidia to be there right now.”

In a document released by Beijing on Tuesday, the Communist party reiterated the importance of self-sufficiency, calling for “extraordinary measures” to achieve “decisive breakthroughs” in technologies such as semiconductors.

“The most important factor in promoting high-quality development is to accelerate high-level scientific and technological self-reliance,” Xi said in a speech released by state news agency Xinhua.

While it’s possible that Chinese restrictions on Nvidia chips could be a long-lasting policy, experts have suggested that the move may be a bargaining chip in trade negotiations with Washington.

Such policy U-turns are creating uncertainty for investors despite the fact that Nvidia shares have risen roughly 50% this year, driven higher by AI ambitions.

Reuters

Trump’s tariff tactics

TikTok deal done?

United States President Donald Trump has spent the better part of this week touting a TikTok “deal” with China, but experts say it is far from finalised after both sides shared details of his phone call with President Xi Jinping.

The two leaders spoke by phone on Friday, their first call in three months, but there was no announcement of the sale of the popular social media app that has 170 million US users.

While Trump, in a post after the call on Truth Social, said “It was a very good call … appreciate the TikTok approval”, the version from Beijing was not as clear.

“On TikTok, Xi said China’s position is clear: the Chinese government respects the will of firms and welcomes companies to conduct business negotiations on the basis of market rules to reach a solution consistent with Chinese laws and regulations while balancing interests,” according to the meeting summary in Xinhua, the Reuters news agency reported.

Experts were not surprised.

“Trump is the type of person who often announces frameworks or deals to have deals or a deal that still has a lot of details to be worked out, and this seems to be another example of that,” said Rachel Ziemba, adjunct senior fellow at the Center for a New American Security.

The bigger trade deal is likely to wait till Trump and Xi meet on the sidelines of the Asia-Pacific Economic Cooperation forum that starts on October 31 in Gyeongju in South Korea, “if that happens”, added Ziemba.

Despite the lack of any specific developments from Friday’s call, experts agree that the leaders talking is in itself a sign of a thaw, especially as Xi had previously refused to get on the phone with Trump, despite the multiple meetings in Geneva, London and most recently in Madrid.

“At least they have broken ice after a long while, and it seems like they are ready to negotiate other more difficult issues,” said Wei Liang, a professor at Middlebury Institute of International Studies, where she specialises in international trade and Chinese foreign economic policy, among other topics.

Some scholars, she said, had likened the last few months as worse than the peak of the Cold War between the US and the former Soviet Union, where leaders of the two countries at least had a hotline in place.

The call was days after Trump extended, for the fourth time, a deadline for China’s ByteDance to divest its ownership of TikTok or face a ban in the US under a law passed last year with overwhelming bipartisan support and one that was later upheld by the Supreme Court.

“It will be a very complicated transaction, if it happens,” said Robert Rogowsky, adjunct professor of trade and economic diplomacy at Georgetown University’s School of Foreign Service, both because Beijing is reluctant to exit the app and because of the lack of clarity of future owners and rules around that.

“The value of TikTok is the algorithm which selects for us what we want to see, but in a way that is remarkably controlling,” said Rogowsky.

While the focus in debates on TikTok’s ownership has centred around data security, the real problem, instead, is its “ability to influence” viewers through the algorithm, said Rogowsky.

“Think about the power that would confer on the owners, the power of that incredibly sophisticated algorithm that drives people’s viewing, when that is under the control of a political party or groups [aligned with one], gives them tremendous power to influence.”

Middlebury’s Liang adds that it is unlikely that China would let go of the algorithm and expects “a graceful exit” that would allow both the US and China to get what they want from this deal.

China’s ‘stronger, bolder stand’

Any hammering out of a bigger trade deal on the multiple other issues, including US access to rare earth metals and China’s purchase of Russian oil and access to US semiconductor chips, will have to wait for the two leaders to meet, experts say.

“What is clear is that Trump himself is not in a space to impose new tariffs on China, and that is a reflection of the fact that the US government has mixed interests with respect to China, and the Chinese control some very important choke points,” said Ziemba, referring to China’s hold over critical minerals.

Rogowsky agrees that “China is taking a much stronger, bolder stand with regard to the US, partly because that’s the China way.”

But it is also likely that Beijing has some justification for that confidence, he said, referring to Beijing’s directive to businesses to avoid buying chips from US chip giant Nvidia.

“While US is trying to control what sort of chips go to China, they have declined to buy those, probably because they have the technology to design equally good or better and cheaper chips,” he said. Plus, with US dependence on Chinese rare earth metals, Beijing is “feeling strong enough to confront the US”.

Top US and Chinese officials are meeting in London in a bid to defuse trade tensions over rare earth minerals and advanced technology after a phone call between Presidents Donald Trump and Xi Jinping last week.

The two sides are aiming in Monday’s talks to build on a preliminary trade deal struck in Geneva in May, which briefly lowered the temperature between Washington and Beijing and offered relief for investors battered by months of Trump’s global trade war.

Since then, the agreement to mutually suspend most of the 100 percent-plus tariffs for 90 days has been followed by barbs and accusations from both sides.

But after reaching a tentative understanding with Xi on resuming the flow of critical minerals, Trump said on Thursday that he expected Monday’s meeting to go “very well”.

Who is leading the US and Chinese delegations?

The US delegation in London is headed by Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer. The Chinese contingent will be led by Vice Premier He Lifeng.

The venue of the meeting has not been disclosed.

What happened during last week’s call between Xi and Trump?

Monday’s meeting comes four days after Trump and Xi spoke by phone, their first direct interaction since Trump’s January 20 inauguration.

After the more than hourlong call on Thursday, Trump said the conversation was focused on trade and had resulted in a “very positive conclusion” for both countries.

In the first readout of the call, Trump posted on his social media site, Truth Social: “I just concluded a very good phone call with President Xi, of China, discussing some of the intricacies of our recently made, and agreed to, Trade Deal.”

“There should no longer be any questions respecting the complexity of Rare Earth products. Our respective teams will be meeting shortly at a location to be determined. During the conversation, President Xi graciously invited the First Lady and me to visit China, and I reciprocated,” he added.

For his part, Xi was quoted by Chinese state TV as saying after the call that the two countries should strive for a win-win outcome and dialogue and cooperation are the only right choice for both.

In recent weeks, both sides have accused the other of breaching their deal made in Geneva and aimed at dramatically reducing tariffs – an agreement Trump touted as a “total reset” after he announced tariffs on all US trading partners on April 2.

The tentative truce struck on May 11 in Geneva brought US tariffs on Chinese products down from 145 to 30 percent while Beijing slashed levies on US imports from 125 to 10 percent.

The agreement gave both sides a three-month deadline to try to reach a more lasting deal.

In what ways have US export controls played a role?

Renewed tensions between the US and China began just one day after the May 12 announcement of the Geneva agreement to temporarily lower tariffs.

The US Department of Commerce issued guidance saying the use of Ascend artificial intelligence chips from Huawei, a leading Chinese tech company, could violate US export controls.

The agency warned companies “anywhere in the world” against using AI chips made by Huawei, claiming they illegally contained, or were made with, US technology.

Beijing publicly criticised Washington’s move to limit access to American technology, accusing the US of trying to stymie China’s ability to develop cutting-edge AI chips.

On May 15, Chinese Ministry of Commerce spokesperson He Yongqian accused the US of “abusing export control measures”, adding that China would take steps to defend its business interests.

Lutnick wasn’t in Geneva last month, but he is a lead negotiator in Monday’s talks in London. His Commerce Department oversees export controls for the US, and some analysts believe his participation is an indication of how central the issue has become for both sides.

China issuing rare earth licences to US companies

In response to Trump’s April 2 tariff announcement, Beijing suspended exports to all countries of six heavy rare earth metals and associated magnets on April 4.

The move upended global supply chains central to automakers, aerospace manufacturers and military contractors.

China produces 90 percent of the world’s rare earth minerals, which are essential components in permanent magnets – used in a swath of high-tech applications.

Without mentioning rare earths specifically, Trump took to social media last month to attack China’s trade restrictions.

“The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US,” Trump posted on Truth Social on May 30.

After Xi and Trump’s phone call last week, however, the Chinese government hinted that it is addressing US concerns, which have also been echoed by some European companies.

On Saturday, China’s Commerce Ministry said it had approved some rare earth exports, without specifying which countries were involved.

It issued a statement saying it had granted some approvals and “will continue to strengthen the approval of applications that comply with regulations”.

On Monday, the rare earth suppliers of three big US automakers – General Motors, Ford and Stellantis – got clearance from Beijing for a handful of export licences.

Washington wants access to as many rare earths as quickly as possible, Kevin Hassett, head of the National Economic Council at the White House, said on the CBS TV network’s Face the Nation programme on Sunday.

“We want the rare earths, the magnets that are crucial for cellphones and everything else to flow just as they did before the beginning of April, and we don’t want any technical details slowing that down,” Hassett said.

What challenges remain?

Student visas don’t normally figure in trade talks, but a recent US announcement that it would begin revoking the visas of Chinese students has emerged as another flashpoint between Washington and Beijing.

On May 28, US Secretary of State Marco Rubio said the Trump administration would begin to “aggressively” revoke the visas of Chinese university students.

He also said the US would revise visa criteria to enhance scrutiny of all future visa applications from China and Hong Kong.

China is the second largest country of origin for international students in the US after India.

More than 270,000 Chinese students studied in the US in the 2023-2024 academic year.

Beijing’s Ministry of Foreign Affairs spokesperson Mao Ning criticised Washington’s decision to revoke the visas, saying it “damaged” the rights of Chinese students.

Other concerns continue to strain the bilateral relationship from the illicit fentanyl trade to the status of democratically governed Taiwan and US complaints about China’s state-dominated economic model.

Still, Trump’s geopolitical bluster goes well beyond China. While promising to reshape relationships with all US trading partners, Trump so far has reached only one new trade agreement – with the United Kingdom.

Trump’s reduction of US tariffs on Chinese goods runs out in August unless he decides to extend it. If deals aren’t reached, the White House said Trump plans to restore tariff rates to the levels he first announced in April.