Trump and Xi Meeting: What's at Stake?

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00:00After more than six years, Presidents Trump and Xi planned to meet face-to-face in South Korea

00:07at a time of significant economic friction between the world's two largest economies.

00:13While their respective teams have held direct trade talks, the opportunity for Xi and Trump

00:18to hammer out at least some of their differences in person could be the catalyst towards more

00:23stable ties, or not. For sure, the leverage game is in full swing.

00:28Earlier this month, Beijing announced a new round of export controls on rare-earth minerals,

00:34vital inputs for a range of high-value industries, including advanced electronics and military systems,

00:40adding intensified uncertainty for global manufacturers, not just in the U.S., but Europe as well.

00:47Most countries know this is not particularly targeted on them. It is mainly a retaliation

00:53to the recent U.S. moves on China. So if these countries, they handle relations with China,

00:59especially trade and economic relations with China, where, without assisting the U.S.

01:05in sanctioning China, in pursuing the export control of China, I think, you know,

01:12they don't have to worry about this.

01:14Now, while the Europeans waive their response, Trump is threatening to hike tariffs on China

01:18to 155 percent from November 1st. China's been very rough with us over the years.

01:24The U.S., citing national security, has implemented its own export controls,

01:29restricting China's access to high-end semiconductors and the equipment to make them,

01:34particularly those used for artificial intelligence. The result? An accelerated push by both nations

01:40for greater self-sufficiency and or an increased reliance on or through other key trading partners,

01:47from critical components to strategic crops. China's buying the bulk of its soybean imports this year

01:54from South America instead of the U.S., and Trump has now struck a deal with Australia for rare earth.

02:01Underlying these economic issues are the geopolitical risks in the Asia-Pacific,

02:06potential heightened military activity, particularly around Taiwan, would no doubt disrupt shipping lanes

02:13and supply chains.

02:15I think when we finish our meetings in South Korea, China and I will have a really fair and really great

02:22trade deal together. I want to be good to China. I love my relationship with President Xi.

02:28China's position on handling China-U.S. economic and trade issues has been consistent and clear.

02:33Trade wars and tariff wars have no winners and are not in the interest of either party.

02:38Both sides should resolve relevant issues through consultations based on equality,

02:42mutual respect and mutual benefit.

02:45For global business, the primary expectation for this on-again, off-again Trump-Xi meeting

02:51is less about finding a single comprehensive deal between the two countries,

02:56but more as an opportunity to seek at least a step towards de-escalation.

03:01Stephen Engel, Bloomberg News, Shanghai.