Economy

Can China’s Xi Jinping Navigate APEC’s Geopolitical Storm After Trump’s “Fragile Trade Truce”?

Xi Jinping at APEC summit: secured trade truce, called for unity amidst global challenges and bilateral talks.

October 31, 2025, 10:08 AM

A close-up profile shot of Xi Jinping, President of the People's Republic of China, wearing a blue suit and tie. By MDL.

Executive Summary

A “fragile trade truce” was secured between China and President Trump, suspending further restrictions on China’s rare earth exports to prevent global supply chain disruptions.

President Xi Jinping took a central role at the APEC summit, calling for unity and the protection of the multilateral trading system amidst accelerating global changes.

President Xi engaged in key bilateral discussions with Japan’s new leader Sanae Takaichi, Canadian Prime Minister Mark Carney, and Thai Prime Minister Anutin Charnvirakul, addressing critical regional and trade issues.

The Story So Far

The Asia-Pacific Economic Cooperation (APEC) summit is convening shortly after President Xi Jinping and President Donald Trump secured a “fragile trade truce,” temporarily suspending restrictions on China’s rare earth exports to prevent global supply chain disruptions. This agreement highlights the underlying geopolitical tensions and trade disputes that have made achieving consensus within APEC increasingly difficult, as evidenced by its failure to issue joint declarations in previous years. Furthermore, the summit’s bilateral engagements, particularly with Japan and Canada, are overshadowed by pre-existing strains concerning security policies, ongoing trade disputes, and allegations of political interference, complicating efforts toward deeper economic cooperation.

Why This Matters

The fragile trade truce between the U.S. and China, temporarily easing rare earth export restrictions, suggests a precarious balance in global supply chains that could easily be disrupted again. President Xi’s prominent role and call for multilateralism at APEC indicate China’s ambition to shape the global economic order amidst “changes unseen in a century,” yet the ongoing bilateral tensions and difficulties in reaching a joint declaration highlight the persistent geopolitical strains challenging regional cooperation and the stability of the international trading system.

Who Thinks What?

President Xi Jinping advocates for multilateralism, unity, and deeper economic cooperation, emphasizing the need to protect the multilateral trading system and engaging in bilateral discussions on trade and security, following a “fragile trade truce” with President Trump.

President Donald Trump and the U.S. administration aim to rebalance trade relationships for global growth and secured a “fragile trade truce” with China to suspend rare earth export restrictions, with President Trump also positioning himself as a global peace broker.

APEC member nation diplomats express skepticism about the prospect of a substantive joint declaration from the summit due to prevailing geopolitical strains and current fractures in global politics, noting that APEC decisions are non-binding and previous summits failed to adopt declarations.

China’s President Xi Jinping has taken a central role at the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, South Korea, following a “fragile trade truce” secured with U.S. President Donald Trump. The summit, which began Friday, October 31, 2025, is expected to see President Xi engage in bilateral discussions with the leaders of Canada, Japan, and Thailand, addressing critical issues ranging from trade disputes to regional security. The agreement with President Trump, reached just before his departure from South Korea, aims to suspend further restrictions on China’s rare earth exports, a move designed to prevent disruptions to global supply chains.

The trade truce was finalized on October 30, 2025, on the sidelines of the APEC summit in Busan, where President Trump met with President Xi before skipping the main two-day event. U.S. Treasury Secretary Scott Bessent attended the summit discussions in President Trump’s stead, stating that Washington is “rebalancing its trade relationships to build a stronger foundation for global growth.” This follows an earlier period where the International Monetary Fund had adjusted global growth outlooks due to President Trump’s tariffs, though conditions have since proved more benign.

Xi’s Call for Multilateralism

Addressing the assembled leaders at the closed-door opening session, President Xi warned of “changes unseen in a century accelerating across the world.” He emphasized the need for unity, stating, “The rougher the seas, the more we must pull together.” His remarks underscored a call for the protection of the multilateral trading system and deeper economic cooperation among member nations.

The summit’s agenda prominently features efforts to bolster supply chains and reduce trade barriers. However, reaching consensus among the 21-member economic club has become increasingly challenging due to prevailing geopolitical strains, and APEC decisions remain non-binding.

Key Bilateral Engagements

Much attention has focused on President Xi’s anticipated first talks with Japan’s newly elected leader, Sanae Takaichi. Sources familiar with the matter indicated that these discussions were expected to take place on Friday. Takaichi, Japan’s first female leader, is known for her nationalistic views and hawkish security policies, which could potentially strain relations with China.

Her recent actions, including accelerating Japan’s military build-up, are seen as a deterrent against China’s territorial ambitions in East Asia. Sensitive issues such as the detention of Japanese nationals in China and Beijing’s import restrictions on Japanese agricultural products are likely to be on the agenda.

Canadian Prime Minister Mark Carney is also scheduled to meet President Xi, aiming to restart broad engagement after years of strained relations. Canada, currently embroiled in a trade dispute with the United States, seeks to diversify its exports, with China being its second-biggest trading partner. Past tensions include detentions of Canadians in China and allegations of Chinese interference in Canadian elections, alongside ongoing trade disputes concerning canola and electric vehicles.

Additionally, Thai Prime Minister Anutin Charnvirakul is slated to meet President Xi. This follows a recently signed enhanced ceasefire deal between Thailand and Cambodia, overseen by President Trump, who has often positioned himself as a global peace broker. President Xi reportedly emphasized China’s significant role in advocating for dialogue on various pressing international matters during his meeting with President Trump.

Prospects for a Joint Declaration

South Korean Foreign Minister Cho Hyun expressed hope for a joint declaration from the leaders when the summit concludes on Saturday. However, two APEC member nation diplomats privately voiced skepticism regarding the substance of any potential statement, citing current fractures in global politics. APEC previously failed to adopt a joint declaration in both 2018 and 2019 during President Trump’s first term.

The APEC region, encompassing nations from Russia to Chile, is a significant economic bloc, accounting for 50% of global trade and 61% of the world’s GDP. Despite its economic weight, the challenges of achieving political consensus underscore the complex dynamics facing the global trading system.