U.S. President Donald Trump and China’s President Xi Jinping are due to meet in South Korea on Thursday, 30 October, with negotiators aiming to contain trade tensions rather than restore pre-January terms.
Officials have sketched limited deliverables: a pause on new tariffs, a delay to China’s latest rare-earth licensing rules, and a path to conclude a restructuring of TikTok’s ownership. Expectations for broader agreement remain low.
Rare earths: one-year licensing delay on the table
Beijing has widened export controls on rare earths, adding five elements—holmium, erbium, thulium, europium and ytterbium—and extending extraterritorial compliance obligations for foreign manufacturers that use Chinese materials or equipment. China refines over 90% of global rare earths, making the measures immediately consequential for electronics, defence and clean-energy supply chains.
After a negotiating round in Kuala Lumpur, U.S. Treasury Secretary Scott Bessent said China had agreed in principle to delay the expanded licensing regime by one year and to review its scope. Beijing has not set out matching specifics in public. Analysts describe a dated delay as a short-term de-risking step rather than a change in policy direction.
Tariffs: suspension likely to be extended
A U.S. suspension that caps reciprocal tariffs on Chinese imports at 30% is due to lapse on 10 November. Mr Trump had threatened additional 100% duties from 1 November in response to the rare-earths move. Following the Kuala Lumpur talks, Mr Bessent said the threat was “effectively off the table”, and both sides are discussing an extension of the existing cap. Final terms are expected to be left to the leaders.
Shipping: tit-for-tat port fees
Washington has introduced port fees targeting vessels built, owned or operated by Chinese entities, a measure framed domestically as support for U.S. shipbuilding that could add an estimated $3.2 billion in costs for the top global carriers next year. China has responded with its own levies on U.S.-linked ships and sanctions affecting affiliates of a South Korean builder. The fees are already altering routing decisions and pushing up rates.
Fentanyl: tariffs tied to precursor controls
The White House has kept 20% tariffs linked to what it describes as Beijing’s failure to curb flows of precursor chemicals used in fentanyl production. The U.S. cites cumulative overdose deaths as context for the measures; Beijing disputes the premise and characterises the linkage as coercive. Officials raised the matter again in Kuala Lumpur without announcing progress.
Agriculture: prospective soybean purchases
U.S. soybean exports were constrained this year amid the tariff dispute. Mr Bessent has signalled that China is prepared to make “substantial” purchases under a proposed framework, a potential quick win that can be verified by shipment data. Prior to this year’s disruption, China bought more than half of U.S.-grown soybeans in 2023 and 2024, with export value peaking in 2022. Volumes and delivery windows remain to be specified.
TikTok: divestment deal ready for leaders
Officials in Washington say the sides have finalised an agreement for a majority divestment of TikTok to U.S.-led investors, upgrading a framework announced last month but not executed. Mr Bessent has suggested Mr Trump and Mr Xi could formalise the deal at their meeting. Reporting indicates U.S. and allied investors would hold a controlling stake and board majority, with operational oversight separated from ByteDance.
U.S. measures in reserve
Should talks stall, Washington is preparing additional tools, including software-enabled export controls and sectoral tariffs aimed at semiconductors, pharmaceuticals and other strategic industries. The U.S. also opened a new investigation on Friday into China’s compliance with the 2020 “Phase One” deal, signalling a readiness to revive earlier enforcement channels.
Signals to watch in Seoul
Four items would indicate practical progress this week: (1) a published, time-bound delay to China’s rare-earth licensing expansion; (2) a formal extension of the 30% tariff cap; (3) dated commitments for Chinese agricultural purchases; and (4) the signing of a TikTok divestment agreement. Movement on fentanyl enforcement and reciprocal port fees looks less likely in the near term.
Market implications
A pause on rare-earth restrictions and tariff escalation would remove near-term tail risks for electronics, automotive and defence suppliers, while confirmed soybean purchases would register quickly in commodity flows.
However, Beijing’s wider export-control architecture remains in place, and Washington’s review and enforcement tracks are active. The outcome in South Korea will turn on whether preparatory understandings are converted into dated, monitorable commitments without collateral disputes in adjacent sectors.
