Gyeongju, South Korea – As U.S. President Donald Trump and Chinese leader Xi Jinping prepare to meet for the first time since 2019, the two countries appear poised to reach an agreement to lower the temperature of their bitter rivalry.
But while President Trump and Mr. Xi are widely expected to ease U.S.-China tensions in South Korea on Thursday, expectations are muted about how far the deal will go to resolve the myriad points of contention between the world’s two largest economies.
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Many of the details of the expected deal that have been flagged in advance are related to avoiding future escalation rather than rolling back the trade war that President Trump started in his first term and has escalated dramatically since returning to office this year.
The proposed measures include issues that have only emerged in recent weeks, such as China’s plan to impose strict export controls on rare earths starting December 1.
No matter what deal Trump and Xi reach on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, there is little doubt that the United States and China will continue to clash as they vie for influence in a rapidly changing international order, analysts said.
“I have modest expectations for this meeting,” said Deborah Elms, director of trade policy at the Heinrich Foundation in Singapore.
“Regardless of what happens this week, I don’t think the economic tensions, the threat of tariffs, export controls and export restrictions, the use of unconventional tools like digital rules are far from over,” Elms told Al Jazeera.
Trading outline
The exact terms of the deal have not yet been decided by Trump and Xi, but the contours of the deal have become clearer in recent days.
U.S. Treasury Secretary Scott Bessent said in a media interview this week that he expected China to postpone its regulations on rare earths, and that President Trump’s threat of 100% tariffs on Chinese goods was “effectively off the table.”
Bessent also said he expected the Chinese side to increase its purchases of U.S. soybeans, increase cooperation with the U.S. to stem the flow of chemicals used to make fentanyl, and agree to finalize the TikTok deal.
While avoiding further deterioration of U.S.-China relations, an agreement along these lines would leave in place a wide range of tariffs, sanctions, and export controls that impede trade and business between the two countries.
Since the US government and China reached a partial truce in May with a flurry of retaliatory tariffs, the average US tariff on Chinese goods has reached more than 55%, while China’s average tariff on US goods has remained at about 32%.
The U.S. government has blacklisted hundreds of Chinese companies deemed to pose national security risks, banning them from exporting advanced chips and key AI-related manufacturing equipment.
Meanwhile, China added dozens of U.S. companies to its list of “unreliable companies,” launched antitrust investigations into Nvidia and Qualcomm, and restricted exports of more than a dozen rare earths and metal elements, including gallium and dysprosium.
Since President Trump re-entered the White House, U.S.-China trade has decreased significantly.
Despite an overall increase in overseas shipments due to expanded trade with Southeast Asia, Latin America, Europe and Africa, China’s exports to the United States fell 27% in September, the sixth consecutive month of decline.
China’s imports of US goods fell by 16%, continuing a downward trend from April.
“The structural contradictions between China and the United States have not been resolved yet,” said Wang Wen, director of the Chongyang Institute of Finance at Renmin University of China in Beijing, predicting that friction between the superpowers would continue and relations would “further deteriorate” in the future.
“The most important thing is that China’s power is increasing and will surpass the United States in the future,” Wang told Al Jazeera.
“De-escalation is unlikely.”
Xiang Guo, a partner at Shanghai-based Hutong Research, said he expected “the majority” of the agreement between Trump and Xi Jinping to be about de-escalation. “Given the US political environment, a fundamental détente is unlikely,” Guo told Al Jazeera.
But Guo said the two countries could put their differences aside for a longer period of time than past trade ceasefires, as the United States has no short-term alternatives to China’s rare earths and minerals.
“This means that the downside risks to the U.S.-China relationship will be reduced for at least a year, and possibly for much longer,” he said.
Dennis Wilder, a Georgetown University professor who worked on China issues at the CIA and the White House National Security Council, said he was optimistic the summit would yield “positive tactical results,” but said it did not signal an end to the trade war.
“A comprehensive trade deal is still not in place,” Wilder told Al Jazeera.
“If President Trump visits China next year, Mr. Bessent and the Chinese side will continue negotiations in hopes of finding a more permanent agreement.”
The very words of President Trump and President Xi Jinping regarding U.S.-China relations indicate that there is a rift between the two sides.
President Trump has often complained that the United States is being “ripped off” by China, while Xi has repeatedly insisted that the relationship be defined by “mutual respect” and “win-win cooperation.”
“The United States should treat China in a way that China believes will be respectful,” said Wang of Renmin University.
“China must respect China, but if it doesn’t, the United States will receive equal treatment until it can respect other countries,” he added.
