Uncertainty Grows Over Trump–Xi Meeting Amid Escalation

WASHINGTON: The White House confirmed Thursday that U.S. President Donald Trump will meet Chinese President Xi Jinping next week in South Korea, as part of Trump’s multi-nation Asia tour that also includes a stop in Malaysia. But optimism is fading fast as Washington and Beijing scramble to salvage the summit amid a renewed flare-up in trade and technology tensions.

The meeting set for Thursday in Seoul comes just a month after Trump hailed “progress” in bilateral talks. Now, both sides are trading accusations over the latest escalation, with analysts warning that even if the summit proceeds, a narrow, tactical deal is the most likely outcome.

“China believes negotiations alone are insufficient and that countermeasures are necessary to resist U.S. pressure,” said Wu Xinbo, director of the American Studies Center at Fudan University.

At the center of the standoff is China’s dramatic expansion of export curbs on rare earths, a move that Washington views as an act of “economic warfare.” The restrictions modeled on U.S. controls targeting semiconductor exports underscore Beijing’s resolve to use its dominance over key mineral supply chains as leverage.

China processes over 90% of the world’s rare earths, essential for everything from defense systems to electric vehicles. Experts say the new curbs mark a sweeping extension of China’s extraterritorial trade power.

“This is a huge expansion of extraterritorial jurisdiction,” said Cory Combs of consultancy Trivium China.

U.S. officials were reportedly caught off-guard by the timing and scope of China’s response. Inside Washington, the move is being interpreted as a direct challenge to Trump’s efforts to reset trade relations in his second term.

“The prospect for escalation is severe,” a U.S. official said, describing the trade rift as a “full-blown economic war.”

To avert a breakdown, U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are scheduled to meet in Malaysia days before the Trump–Xi encounter. Yet, observers see limited space for compromise. Both governments believe their respective economies are resilient enough to endure the confrontation a perception that risks deepening the divide.

“Chinese officials feel confident in their economy and see the U.S. in political turmoil,” said Michael Hart, president of the American Chamber of Commerce in China. “Meanwhile, U.S. officials believe the opposite — that China’s economy is faltering.”

The talks follow months of friction on issues from market access and chip sales to TikTok and fentanyl trafficking. Trump has threatened 100% tariffs if no progress is achieved in Seoul, even as his administration explores selective easing on certain technology exports.

Analysts say both sides are maneuvering for leverage the United States by signing a new critical minerals pact with Australia, and China by tightening its rare earths regime and hinting at potential antitrust actions against U.S. firms.

While a breakthrough appears unlikely, a modest confidence-building framework or Phase One–style follow-up could emerge in early 2026, says former Biden administration official Peter Harrell.

“The best-case scenario is renewed directives to negotiate a broader deal early next year,” he noted.

For now, the Trump–Xi summit in Seoul looms as a test of whether the world’s two largest economies can manage confrontation through controlled diplomacy or slide further toward a prolonged era of strategic decoupling.

-David Hunnicutt