Trump-Xi Meeting Next Week At APEC Summit — What To Expect
The US economy remains heavily dependent on Chinese inputs for many manufactured goods. An abrupt and full separation would cause massive economic shocks to both supply and demand.
APEC is a regional economic forum of 21 member economies that promotes free trade and investment. Established in 1989, its goal is to foster prosperity through economic cooperation by making trade easier, promoting inclusive growth, and addressing economic challenges through dialogue and voluntary, non-binding commitments.
The forum includes 21 countries from around the Pacific Rim and is a major driver of global economic activity. The APEC member countries include the United States, China, Russia, Japan, Canada, South Korea and Australia.
The next APEC Summit will be held from Oct. 31 to Nov. 1, 2025 at Gyeongju, South Korea. The summit's theme is "Building a Sustainable Tomorrow," with three key priorities: strengthening supply chains and cross-border exchanges, using technology, including AI, to enhance competitiveness and fostering inclusive and sustainable growth through social and environmental initiatives.
The summit is being held amid moderate trade growth and supply chain disruptions. Persistent trade disputes and geopolitical competition between the United States and China add a layer of complexity and high tension to the proceedings.
President Donald Trump and President Xi Jinping are scheduled to meet on the sidelines of the APEC summit. It will be the first in-person meeting between them since 2019, when the two met in Japan at the G20 summit.
Their meeting will take place against the background of high tension and a series of tit-for-tat escalations, with a fragile tariff truce set to expire in November. Ahead of their upcoming meeting Trump has said he would make a deal on “everything” with Xi, pointing to potential agreements on agriculture and nuclear arsenals.
It may be recalled that in April 2025, the US had imposed 145% tariffs on most goods from China, while China had responded with 125% tariffs.
A "90-day truce on tariffs" was reached by these two countries in May 2025, which was a temporary agreement that reduced tariffs between the two countries from their peak levels to allow for further negotiation. This truce was extended by 90 days in August 2025, but a more permanent agreement has not been finalized.
Before the Trump-Xi meeting, the US-China trade talks will resume at Malaysia’s capital Kuala Lumpur. Chinese Vice Premier He Lifeng, who has been the lead negotiator for his country, will hold talks with US Treasury Secretary Scott Bessent from Oct. 24 to 27, but whether a deal can be reached remains uncertain.
If the negotiations fail to produce a more permanent agreement by the Nov. 10 deadline, the original higher tariff rates could be reimposed.
The mutual pressure from the US and China over tariffs stems from deep-seated economic, political, and strategic disagreements that have intensified throughout 2025.
The US has used tariffs to address what it claims are unfair Chinese trade practices, while China has responded with its own retaliatory measures to defend its interests. While both countries have sought to de-escalate tensions at times, the underlying issues and competing agendas persist.
China recently announced new export controls on a range of strategic materials, including expanded restrictions on rare earth elements, superhard materials (like synthetic diamonds), and high-performance lithium battery components. These are crucial for advanced technologies and defense.
A significant aspect of the new rules is the extension of jurisdiction to items produced outside of China if they are made with controlled Chinese technology or materials. The new measures also include controls on related technologies, such as those for rare earth mining and magnet production.
In retaliation for the Chinese restrictions on exporting rare-earth minerals, which are critical for US technology and defense industries, Trump threatened to impose a 100% tariff on Chinese goods, beginning Nov. 1, 2025. In a move seen as a direct response to China's rare earth dominance, the US also signed a critical minerals agreement with Australia.
Failure of US-China trade talks could bring significant and painful consequences for both countries. A breakdown would mean a deepening trade war marked by higher tariffs, greater uncertainty, and further disruptions to supply chains.
Renewed and higher tariffs on Chinese imports would directly raise costs for American consumers and businesses. A major escalation could drive prices up significantly. Escalating trade tensions would increase uncertainty for businesses, which could freeze investment, hamper growth, and potentially contribute to a recession.
The US economy remains heavily dependent on Chinese inputs for many manufactured goods. An abrupt and full separation would cause massive economic shocks to both supply and demand.
There would also be significant consequences for China. Escalating trade tensions and loss of the US market would further slow China's economic growth, which is already grappling with domestic issues.
A prolonged trade war would particularly hurt China's small businesses, a major engine of its economy, and could lead to rising unemployment. As US tariffs and export controls restrict access to American markets, Chinese manufacturers would need to pivot to other regions, a costly and challenging process.
Summing up, the APEC summit provides a forum for direct, face-to-face dialogue between Trump and Xi potentially bypassing lower-level disputes and allowing for personal diplomacy. The talks between the two leaders will test their ability to navigate a complex and increasingly fragile relationship.
Both leaders have political motives driving their strategies, and a positive outcome could be claimed as a victory on the domestic front. Due to the scale of the two economies, the outcome of any meeting between their leaders has major implications for global trade, supply chains, and market stability.
If talks fail, Trump has threatened to impose 100% tariffs, and China could aggressively enforce its rare-earth mineral export controls or launch antitrust investigations into US firms. A breakdown in dialogue could lead to a renewed cycle of retaliatory policies, causing further market volatility and supply chain disruption.
Disclaimer: The views expressed here are those of the authors and do not necessarily represent the views of NDTV Profit or its editorial team.
