Gyeongju – Donald Trump (79) and Chinese President Xi Jinping (72) will meet in Gyeongju, South Korea, on Thursday – their first face-to-face meeting since 2019 and Trump's return to the White House. After months of escalating trade tensions, a trade deal between the world's two largest economies appears to be on the horizon.
Since April, Trump had gradually increased import tariffs on Chinese goods to as high as 145 percent. Beijing responded with retaliatory tariffs of 125 percent on imports from the US.
Now the meeting is supposed to bring about a change.
► On the way to South Korea, Trump confidently declared: “Relations with China are very good. So I think we will achieve a very good outcome for our country and for the world.” Aboard Air Force One, the US president continued: “I expect we will lower tariffs.” What explains this change of heart?
Fight against the fentanyl crisis
According to the Wall Street Journal, Beijing has offered to more strictly control the export of chemicals, particularly precursors to the drug fentanyl. Tens of thousands of people die from the opioid in the US every year – many of the substances originate in China. Washington has accused Beijing for years of being partly responsible for the fentanyl crisis in the US."I believe they will help us with the fentanyl situation," Trump said before the meeting.
► According to US reports, the meeting could also address rare earth elements – those metals that are essential for cell phones, electric cars, and weapons. China controls more than 90 percent of global processing and has recently restricted exports.
► Soybeans are also part of the power game: Beijing was the most important buyer of American beans for years, but has completely stopped imports since May – a hard blow for US farmers.
► And the Russia issue also plays a role: Trump wants to get Xi to put more pressure on Moscow to end the war in Ukraine.
Excessive costs and production losses
“The US and China now know very well where they are vulnerable and how they can harm the other side,” says Tim Rühlig (39), China expert at the European Union Institute for Security Studies (EUISS). Both sides “are also aware of the costs associated with escalation.”
Threats are followed by relaxation – whenever costs and production losses become too great, explains Rühlig. But he is also clear on one point: Washington and Beijing are vying for power and influence in the world. Any agreement is likely to be short-lived.
China expert Eberhard Sandschneider also warns against overestimating the significance of the meeting."Both sides are concerned with preventing the trade dispute from escalating," he says. While an agreement on new tariff levels and relaxations is possible,"the fundamental conflict between the US and China continues."
