Trump Expected to Meet Xi in South Korea as U.S.-China Tensions Ease
U.S. President Donald Trump remains on course to meet Chinese President Xi Jinping in South Korea later this month, as both sides work to de-escalate trade tensions stemming from recent tariff threats and export control disputes, U.S. Treasury Secretary Scott Bessent said on Monday.
The renewed strain began after China announced last Thursday that it would expand export controls on rare earth materials, a move that prompted Trump to threaten a 100% tariff on Chinese goods. The exchange sent markets tumbling and reignited friction between the world’s two largest economies.
Speaking to Fox Business Network, Bessent said that substantial communication had taken place between U.S. and Chinese officials over the weekend, and that further meetings were expected in the coming days.
“We have substantially de-escalated,” Bessent said. “President Trump has postponed the tariff implementation until November 1. He will meet Party Chair Xi in Korea, and that meeting remains on schedule.”
The leaders are expected to meet during the Asia-Pacific Economic Cooperation (APEC) Summit, hosted by South Korea in late October.
Market Reaction and Policy Context
The announcement of progress helped calm investor nerves, driving a sharp rebound on Wall Street. The Nasdaq Composite Index rose nearly 2%, while the S&P 500 and Dow Jones Industrial Average gained around 1%.
Trump’s tariff threats on Friday had triggered a widespread sell-off, intensifying concerns that the ongoing AI investment boom could lead to excessive market volatility and future job risks.
Bessent also confirmed that U.S. and Chinese officials will hold staff-level discussions this week in Washington, on the sidelines of the World Bank and IMF Annual Meetings.
“The 100% tariff does not have to happen,” Bessent added. “Despite last week’s announcement, communication channels are open, and the relationship remains constructive.”
U.S. Pushback Against China’s Rare Earth Controls
While expressing optimism, Bessent described China’s latest move as provocative, saying that the United States had pushed back firmly and was coordinating with allies including Europe, India, and key Asian democracies.
“China is a command-and-control economy,” Bessent said. “But they will neither command nor control us.”
In response, China blamed the U.S. for escalating trade tensions, calling Trump’s tariff threats “hypocritical” while defending its export restrictions on rare earth elements — materials critical to global tech manufacturing.
Under China’s new export regulations, even foreign companies using Chinese-made materials or equipment will need an export license, regardless of whether the transaction directly involves Chinese firms.
Bessent confirmed that the United States would reject any such licensing demands.
Trump’s Friday tariff announcement initially sent the S&P 500 Index down over 2%, marking its biggest single-day decline since April, as investors reacted to the renewed uncertainty in U.S.-China trade relations.
