World News: Trump-Xi Jinping Showdown: Who Will Blink First in the High-Stakes Trade War?

The world's attention is fixed on the upcoming highly anticipated meeting between US President Donald Trump and Chinese President Xi Jinping. This pivotal encounter is scheduled to take place on October 30 during the Asia-Pacific Economic Co-operation (APEC) conference in South Korea, a meeting that has been confirmed by the White House. While planned for a significant period, the escalating trade war between the world's two largest economies had recently pushed this meeting to the brink of cancellation, fueling global market uncertainty and raising concerns about international economic stability.

Escalating Trade Tensions and Recent Developments

Earlier this month, China announced new restrictions on rare earth exports, citing national security concerns. China holds a near-monopoly on rare earth elements, which are crucial for manufacturing high-tech products like smartphones, electric vehicles, and military hardware, while in response, Trump retaliated by threatening to impose a 100 percent tariff on all Chinese goods starting in November, Notably escalating the already tense situation. Both nations subsequently softened their stances, indicating a willingness for dialogue, yet they continue to accuse each other of exacerbating tensions and destabilizing markets, while trump has stated his intent to "deal with everything" from tariffs to rare earth with China, but he may be underestimating Beijing's resolve, as China has delivered its strongest response yet to the tariff war initiated by Trump.

The High-Stakes 'Chicken Game' Analogy

According to Wen-Ti Sung, a China expert at the US think tank Atlantic Council, "Both sides are playing a 'chicken game' with very high stakes. " Chong Ja Ian, an associate professor of political science at the National University of Singapore, adds, "Both countries believe they can endure more pain than the other. And perhaps that's part of the negotiation process. " Sung suggests that one of Trump's strategies is a "test of dominance, while " If China buckles under pressure, it could set the direction for US-China relations for months to come. However, the likelihood of China yielding is considered low. Xi Jinping is in his 13th year in power and doesn't need a. Bilateral summit with Trump to assert himself, further cementing his strong political standing within China.

China's Benefit from and Economic Resilience

Beyond rare earth, China has also strategically targeted the US soybean sector, a critical base for Trump's key supporters. In September, US soybean shipments to China fell to zero for the first time since November 2018, while imports from Brazil and Argentina soared. China is the world's largest soybean importer, primarily using it for animal feed. Julian Evans-Pritchard, head of China Economics at analysis firm Capital Economics, notes. That despite US tariffs, China's exports have remained "much stronger than expected. " While this did contribute to a 0. 3 percent dip in China's GDP in September, it highlights Beijing's surprising resilience in the face of economic pressure.

Potential Weaknesses for China

Should the trade war with the US drag on, China's position could weaken as American importers accelerate their search for alternative suppliers and diversify supply chains. For instance, Apple announced earlier this year its plan to shift most of its iPhone production for the US market from China to India, while in June, Nike also revealed plans to move some of its manufacturing operations out of China. Evans-Pritchard cautions that it would be "unwise to assume" China has developed "permanent immunity" to US tariffs, especially as the Renminbi (Yuan) has weakened against currencies other than the US dollar, helping China maintain export competitiveness, while exports remain a primary engine of growth for China's economy, which is grappling with boosting domestic consumption and recovering from a real estate crisis.

US Counter-Strategies and Limitations

Some experts believe China might be miscalculating Trump's resolve. According to Sun Yun of the US think tank Stimson Center, "China has developed a 'dangerous habit' of underestimating America's capacity to hit back, while " Noise McDonagh, a professor of international trade at Edith Cowan University in Australia, suggests the US could impose new trade restrictions by targeting China's technology sector. For example, the US has already barred China from purchasing Nvidia's most advanced chips. However, Professor McDonagh also notes that while targeting the tech sector could slow China's progress,. It "won't stop it entirely," indicating the complex and multifaceted nature of this technological rivalry. **Market Pressure on Trump: Who Will Yield First? Some analysts suggest that market reactions have forced Trump to soften his stance, while after Trump's tough response to China's rare earth announcement on October 10, the US stock market incurred losses totaling $2 trillion. In contrast, China's policies are far less influenced by market sentiment, given its highly centralized decision-making apparatus. Xi Jinping is widely regarded as the most powerful Chinese leader in recent decades, and. The ruling Communist Party maintains strict control over state-controlled industries, which adhere to central government directives.

China's Evolving Strategy: From 'Student to Professor'

Some analysts contend that China is fully prepared for a potential second Trump term, playing a 'hard game' based on a long-term study of Trump's style and strategies—tariffs, tech wars, and even the handling of the COVID-19 pandemic. According to Ryan Hass, a senior researcher at the US think. Tank Brookings Institution, China has evolved "from a student to a professor. " He suggests that since Xi Jinping came to power, China has shifted from "reactive attacks" (responding only when provoked) to "opportunistic activism" (proactively seizing opportunities), while this shift is linked to China's growing power. The US-China trade war, initiated during Trump's first term, further accelerated Xi's "self-reliant China" agenda. Since then, the Chinese leadership has used the trade war as an opportunity to bolster domestic nationalism and reduce dependence on the American market. This has given Beijing the confidence to use its supply chains as. A strategic weapon, with the rare earth supply disruption being a prime example.

Warnings for China

However, Professor Elizabeth Larus of the US think tank Pacific Forum warns that Chinese leaders have accurately gauged Trump's ego and vulnerabilities. She states, "Trump gets along well with strong male leaders until they test his tolerance, while when that happens, Trump retaliates. Chinese leaders should be wary of this aspect of Trump's personality, while " Larus also advises China to be cautious of Trump's "impulsive decision-making tendencies. " They should also be mindful of the influence of his impactful advisors, such as White House Deputy Chief of Staff Stephen Miller and right-wing activist Laura Loomer. While some form of agreement might emerge from the APEC summit between Trump and Xi, it's highly unlikely that both nations will swiftly resolve their fundamental differences, as both sides remain deeply committed to their respective national interests.