Trump, Xi hold high-stakes summit in Busan amid hopes for temporary trade truce

US President Donald Trump and Chinese President Xi Jinping met on Thursday for the first time since 2019, holding a closely watched summit aimed at easing tensions in their prolonged trade war. The meeting took place at Naraemaru, a reception hall inside an Air Force base in Busan, shortly after Xi arrived in South Korea for a three-day state visit.

Trump, who travelled from Gyeongju, the venue of this week’s APEC meetings, struck an optimistic tone ahead of the talks. “We’re going to have a very successful meeting,” he said while posing for photographs with Xi. “But he’s a very tough negotiator. That’s not good,” he added with a wry smile.

At the centre of the discussions is a potential trade arrangement under which China would suspend its planned export controls on rare earth minerals for a year in exchange for Washington cancelling a proposed 100 per cent tariff on Chinese goods due to take effect on 1 November. Officials from both sides reportedly finalised a framework for the deal over the weekend.

The world’s two largest economies remain at odds over several trade issues. China’s suspension of US soybean purchases this year has hurt American farmers, a crucial part of Trump’s political base.

Meanwhile, the US has used tariffs to pressure Beijing to curb the export of fentanyl and its precursor chemicals. Trump signalled this week that he might ease the 20 per cent fentanyl-related tariffs if China commits to restricting such exports.

The trade war, which began during Trump’s first term, has seen multiple rounds of punitive tariffs. At its height earlier this year, the US imposed duties of up to 145 per cent on Chinese imports, while China responded with tariffs of 125 per cent on US goods. A tentative truce in May reduced the rates to about 50 per cent on Chinese products and 10 per cent on American exports.

Trump wrote on Truth Social before the meeting that he was “very much looking forward” to his talks with Xi, calling the summit “an important moment.” Although analysts do not expect a complete resolution, any agreement that reduces tariff uncertainty would be seen as a step forward.

Security tensions also loom large in the background. Beijing’s assertive stance in the South China Sea, its support for North Korea, and growing friction over Taiwan continue to strain relations. However, Trump indicated that Taiwan may not dominate discussions. “I don’t know that we’ll even speak about Taiwan,” he told reporters aboard Air Force One. “He may want to ask about it — there’s not that much to ask about. Taiwan is Taiwan.”

Wendy Cutler, former Acting Deputy US Trade Representative, told Al Jazeera that the meeting could yield a “temporary truce” but not a long-term breakthrough. “We could see China agreeing to buy more US soybeans and restrict fentanyl precursor exports, but Beijing will expect concessions in return,” she said. “The outcomes are likely to stabilise relations for now, though escalation remains likely down the road.”

She attributed the persistent tensions to “a lack of trust, the desire to gain the upper hand, and policies aimed at boosting domestic competitiveness.”

Yun Sun, Director of the China Programme at the Stimson Center, said the atmosphere in Busan was expected to be “very positive,” despite disagreements. “In China, there is quiet confidence that President Trump tends to inflate his demands but is open to negotiation,” she said, referencing a popular acronym in Beijing — TACO, short for ‘Trump Always Chickens Out’.

Both leaders, observers note, hold significant leverage. While the US wields the threat of steep tariffs, Washington also depends on Beijing for critical rare earth supplies making Thursday’s summit a pivotal moment in shaping the next phase of US-China relations.

If the meeting results in even a modest trade accord, it could mark the most notable success of Trump’s five-day Asia tour.

With IANS inputs