US allies in Asia want a truce between Trump and Xi, but not at the expense of it

The United States’ Asian allies hope a meeting between U.S. President Donald Trump and Chinese President Xi Jinping will ease tensions between the world’s two largest economies. They don’t want that stability to be gained at the expense of it.

Ahead of Thursday’s summit in Washington, the United States joined Japan and South Korea in reaffirming its “ironclad” defense commitments to both countries and opposing attempts to unilaterally change the status quo across the Taiwan Strait.

The statement came amid concerns that President Trump could soften Washington’s position on Taiwan and other regional security issues in exchange for concessions from Beijing on trade and support over its war with Iran.

“Generally speaking, U.S. allies and partners in the region do not want U.S.-China relations to develop to the detriment of their national interests, but they also want to guard against a breakdown in U.S.-China relations that increases the risk of conflict in the region,” said Jeremy Chan, senior analyst for China and Northeast Asia at Eurasia Group.

Trustworthiness of Taiwan and the United States

Taiwan will be a notable flashpoint between the two countries, but it is unclear whether the island will be included in the talks.

China has repeatedly called on the United States to end arms sales to the democratically governed island, which Beijing considers part of its territory.

After his last meeting with Xi in May, President Trump postponed a planned $14 billion arms package to Taiwan, saying arms sales were a negotiating tool in the U.S. relationship with China, according to the Associated Press.

Ahead of this week’s meeting, Taiwan’s Ministry of Defense said it remained in close contact with the US government to ensure arms sales proceed as planned.

“Japan and the Philippines are concerned that President Trump will weaken U.S. support for Taiwan in exchange for economic concessions from China and help ending Beijing’s war with Iran,” Jeremy Chan, senior analyst for China and Northeast Asia, told CNBC.

Manila and Tokyo both have rocky relations with China, the Philippines has clashed with China over incursions into disputed waters in the South China Sea, and Japan has faced a cooling in bilateral relations since Prime Minister Sanae Takaichi suggested last year that a Chinese invasion of Taiwan could prompt the involvement of Japan’s Self-Defense Forces.

Derek Grossman, founder of consulting firm Indo-Pacific Solutions, echoed Chan’s views in an August interview.

Grossman said that as the Iran war dragged on, the US government began diverting weapons and ammunition from the Asia-Pacific region to sustain the war against Tehran.

This made it more difficult for the US government to quickly respond to a potential Chinese invasion and built a narrative that the US is not as committed to the region as it says it is.

Relations in Seoul have been unstable since President Trump abruptly canceled joint US-South Korea exercises last month, calling them “provocative” against North Korea. Experts told CNBC the move jeopardizes coalition readiness and U.S. credibility.

In comparison, expectations are more modest on the economic front.

“There could be some small gains on the trade side,” said Andrew Tilton, chief Asia-Pacific economist and head of emerging economies research at Goldman Sachs.

“There was no expected backsliding. The general view is that there is an incentive on both sides to keep the relationship on track in the coming months,” he told CNBC’s “Squawk Box Asia.”

When President Trump imposed “Liberation Day” tariffs on China in April 2025, the two countries engaged in a retaliatory tariff battle, with each other’s export tariffs rising to 145% on exports from China to the United States and 125% on exports from the United States to China.

Although the Liberation Day tariffs under the International Emergency Economic Powers Act were struck down by the Supreme Court, a 12.5% ​​tariff has been imposed on Chinese exports since July, which the US government claims is due to China’s failure to ban forced labor on its products.

Other tariffs remain in place on shipments from the Chinese government to Washington, including sectoral taxes of up to 50% under Section 232.

Julia Wang, chief investment officer for North Asia at Nomura International Wealth Management, told CNBC that countries are looking for two things: tariff stability and trade stability. He said extending the trade ceasefire beyond six months would be seen as a more meaningful signal of stable relations.

However, as the summit began, Treasury Secretary Scott Bessent announced that the truce would be extended by two months, until January 10th.

Southeast Asian countries are somewhat optimistic about the talks, but Eurasia’s Zhang said they are likely to focus on the U.S.’s significant reduction in tariffs on China.

A narrower tariff gap between China and Southeast Asia could reduce incentives for Chinese manufacturers to set up production elsewhere in the region, which could reduce the flow of Chinese goods through their countries and reduce investment by Chinese manufacturers.

“One of the ironies for Southeast Asia is that even though Southeast Asian countries don’t like geopolitics, they benefit from the fact that companies are looking for neutral zones to put their supply chains,” Chris Miller, a professor of international history at Tufts University, said in an interview earlier this month.

The most significant outcome for Southeast Asia may therefore be what the conference reveals about the future of the trade cease-fire and the tariff differential between China and the region, Stephen Olson, visiting senior fellow at ISEAS’s Yusof Ishak Institute, wrote in the institute’s magazine on September 21.