Trump-Xi Meeting: Global Economy's Fate Hangs in the Balance

The world holds its breath as President Donald Trump and Chinese President Xi Jinping prepare for their first face-to-face meeting in six years. Scheduled for late Wednesday night Eastern Time in Busan, South Korea, this high-stakes summit could determine whether the global economy continues its downward spiral or finds a path toward stability. With trade tensions reaching fever pitch and tariffs threatening to choke international commerce, the outcome of this 3-4 hour meeting will reverberate across every continent.

The Stakes Have Never Been Higher

After Treasury Secretary Scott Bessent announced a preliminary framework agreement following negotiations in Malaysia, expectations are building that Trump and Xi can finalize a deal that averts economic catastrophe. But experts warn that any breakthrough will likely provide only temporary relief—short-term adjustments rather than the structural changes needed to address one of the world's most consequential relationships.

Critical Issues on the Negotiating Table

Rare Earth Minerals: China's Trump Card

China's dominance over rare earth minerals—controlling 70% of global mining and over 90% of processing capacity—has become Beijing's most powerful bargaining chip. These critical materials are essential for everything from smartphones and AI systems to defense technology. China recently expanded restrictions on rare earth exports, requiring foreign firms to obtain government approval even for products containing trace amounts of these minerals.

While Bessent claims China has agreed to delay these restrictions for one year, analysts caution this timeline isn't nearly enough to build viable alternatives. "It's been studying the U.S. export control regime and absorbing the lessons of just how powerful a diplomatic tool can be," explains Neil Thomas, fellow at the Asia Society Policy Institute's Center for China Analysis.

The Tariff Tightrope

The November 10 deadline looms large—that's when the 90-day truce on sky-high tariffs expires. Currently, the average Chinese tariff on U.S. exports stands at 32.6%, while American tariffs on Chinese goods hover at 57.6%. In April, both sides saw rates surge past 130%, threatening to effectively embargo trade between the world's two largest economies.

Trump's threat to impose an additional 100% tariff on China in response to rare earth controls now appears to be off the table. The president has also indicated he expects to lower the 20% fentanyl-related tariffs imposed earlier this year, addressing longstanding concerns about the flow of fentanyl precursor chemicals from China.

American Farmers Caught in the Crossfire

U.S. soybean farmers have been devastated by the trade war, with China turning to Argentina for supplies. However, recent developments offer hope—China has purchased its first cargoes from this year's U.S. harvest, according to Bloomberg and Reuters. While this could signal temporary relief, the long-term trend shows China steadily reducing its reliance on American agricultural products, threatening the livelihoods of countless farming families.

The TikTok Deal and Digital Sovereignty

The fate of TikTok hangs in the balance as well. Bessent believes Chinese officials have agreed to approve a transaction creating a joint venture majority-owned by U.S. investors, with Oracle overseeing the algorithm. The White House announced last month this arrangement would allow the hugely popular app to continue operating in the United States, potentially resolving one of the most contentious tech disputes between the nations.

Taiwan: The Elephant in the Room

Some experts believe President Xi is angling for Trump to signal a shift in U.S. support for Taiwan, the democratically governed island that Beijing claims as its own. However, Trump downplayed the issue, telling reporters, "I don't know that we'll even mention Taiwan. There's not that much to ask about. Taiwan is Taiwan." This ambiguity has prompted other administration officials to reassure allies that the U.S. will not abandon its commitment to Taiwan's security.

Beyond Trade: Geopolitical Chess Moves

Trump also wants Xi to leverage his influence over Russian President Vladimir Putin to help end the war in Ukraine and to stop buying Russian energy. These requests add another layer of complexity to already delicate negotiations, intertwining trade issues with broader geopolitical considerations.

A Shifting Paradigm?

Both leaders enter this meeting from positions of perceived strength. "Both sides have an interest in cooling down the trade war," says Feng Chucheng, partner at Hutong Research. "There's a growing revelation in the U.S. that mutually dependent coexistence may be beneficial. In that sense, the U.S. paradigm on China is gradually shifting."

On Monday, China's foreign minister Wang Yi spoke with U.S. Secretary of State Marco Rubio, acknowledging setbacks in the trade relationship and calling on both sides to uphold "the spirit of equality, respect and mutual benefit." Meanwhile, China signed an upgraded free trade agreement with the Asean bloc, its largest trading partner, signaling Beijing's determination to reduce its dependence on America.

What Success Looks Like

According to Bonnie Glaser, managing director of the Indo-Pacific programme at the German Marshall Fund, "Both want to avoid a return to the very high tariffs that they threatened each other with earlier this year." Success in Busan won't mean solving all problems between Washington and Beijing, but rather establishing a framework for managing disagreements without plunging the global economy into chaos.

Trump struck an upbeat tone aboard Air Force One, saying, "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." Whether that optimism proves justified will determine the economic fortunes of billions of people worldwide.