Xi strikes conciliatory tone as he meets Trump in South Korea

Chinese President Xi Jinping said Thursday that Beijing and Washington should be “partners and friends,” as his meeting with U.S. President Donald Trump on addressing trade and tariff concerns got underway.

This is the first time the two leaders are meeting in person since Trump began his second term in January. 

Walking into the meeting, Trump said that both sides had already agreed to many things and would “agree to some more now,” according to Reuters.

In a separate statement released by the Chinese foreign ministry, Xi said it was “normal for the two leading economies of the world to have frictions now and then,” while urging both sides to work together and “ensure the steady sailing forward of the giant ship” of bilateral relations.

Xi also lauded Trump’s efforts in brokering peace in regional conflicts while stressing China’s role in promoting peace talks on various issues, after the American leader earlier this month hinted that China played a limited role in Thailand and Cambodia ceasefire talks.

“Although the meeting itself is not about peace, [Xi] is mostly trying to create an atmosphere conducive to a deal,” said Tianchen Xu, senior economist at the Economist Intelligence Unit.

The high-stakes meeting comes as tensions between the world’s two largest economies have been on the boil this year. The latest escalation in tensions came this month, with Beijing  export controls and Washington threatening to ban software-powered exports to China. 

The U.S. in recent days has shared details about deals they hope to achieve with China – from restricting the flow of fentanyl to the U.S. to TikTok’s divestiture from its Beijing-based parent ByteDance. Tariffs, tech curbs and rare earths are also on the table for discussion.

Beijing had been more circumspect about the prospects of an agreement, but in a possible sign of thawing relationship, China bought its first cargoes of U.S. soybeans in several months, Reuters reported Wednesday. 

Xi is in South Korea – his first state visit in 11 years – from Thursday to Saturday to attend the APEC Economic Leaders’ Meeting in Gyeongju.

Investors are cautiously watching for headlines from Busan as the trade war between the U.S. and China has kept investors on edge. Global markets soared at the start of the week on growing optimism that the U.S. and China could near an agreement on trade.

“A return to dialogue and engagement — no matter the near-term results — is critical to moving the U.S.-China relationship forward in the long term,” said Curtis Chin, chair at the Milken Institute, also a former U.S. ambassador to the Asian Development Bank.

That said, “headline-making deals and meetings will need to be followed by well-executed implementation and fulfillment of commitments by both sides,” said Chin.