President Trump’s closely-watched summit with Chinese President Xi Jinping is set for this Thursday in South Korea with increasing expectations after the weekend of advance talks have resulted in an environment that both sides say could be conducive to compromise.
“I believe we’ve reached a very substantial framework that will avoid [a tariff hike] and allow us to discuss that and many other things with the Chinese,” Treasury Secretary Scott Bessent said Sunday morning on NBC’s Meet the Press.
The positive environment, he added, means he does not anticipate that Trump’s promise of 100% additional tariffs on China will go into effect on Nov. 1 as currently planned.
Chinese state media confirmed this weekend’s talks in Malaysia yielded progress describing a “basic consensuses on arrangements.”
Perhaps most of interest to markets is talk from both Trump and Bessent that they see a path to de-escalation in what the president has described as an ongoing trade war between the world’s two largest economies.
“They’ll have to make concessions, I guess we will too” Trump said on Air Force One this weekend as he flew to Asia.
He added specifically of tariffs and his threat of a new 100% tariff rates that would push top-line rates north of 150% “I wouldn’t like to see it.”
The meeting between the leaders will come Thursday morning local time on the sidelines of this week’s Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, South Korea.
Gyeongju is 11 hours ahead of Washington, D.C., meaning the sit-down is set to begin late Wednesday evening in Washington local time.
Analysts like Terry Haines of Pangaea Policy noted Sunday that these “nice noises” are likely to be at least a small positive for markets in the days ahead but with a warning that the larger picture for the moment remains that there appears to be “enough to keep the trade ‘truce’ in effect for another few months, but not to create progress or stability.”
The two presidents have spoken over the phone at least twice so far during Trump’s second term, most recently in September but this will be their first face-to-face meeting of Trump’s second term.
The meeting came after a weekend meeting between Treasury Secretary Scott Bessent and his Chinese counterpart, Chinese Vice Premier He Lifeng in Malaysia.
When the two president’s sit down later in the week, that meeting is set to cover a wide array of topics with two issues most in focus in addition to tariffs increases: China’s recent moves to choke off the world’s supply of rare earth minerals and China’s purchases of Russian oil.
