Trump–Xi to Meet in Busan Next Thursday: U.S. Pressure, Leverage, and Global Supply Chain Stakes

Overview

The White House says President Donald Trump will meet Chinese President Xi Jinping next Thursday in Busan, South Korea, on the sidelines of APEC. The meeting comes after weeks of tariff threats and new export controls. Below we map the pressure tools Washington can deploy, the U.S. bargaining chips, deal shapes that would favor America, and the knock‑on effects for global supply chains and the U.S. economy.

What Washington Can Do to Pressure Beijing

• Tariff escalation with carve‑outs: Keep headline rates high (or threaten increases) while carving out relief for allies and critical inputs to avoid domestic shortages.
• Export controls with tighter anti‑circumvention: Expand restrictions on advanced chips, AI accelerators, lithography, and EDA—with stricter end‑use and re‑export rules and “know‑your‑customer” obligations.
• Software & cloud leverage: Use U.S. control over cloud platforms, developer ecosystems, and foundational software licenses to slow Chinese access to high‑end AI training at scale.
• Financial tools: Scrutinize Chinese listings and dollar access; widen outbound investment screening; target entities aiding military‑civil fusion.
• Allied coordination: Synchronize with the EU, Japan, South Korea, and Taiwan on standards, export lists, and supply‑chain security measures.

The U.S. Bargaining Chips

• Market access: Phased tariff relief in exchange for verifiable actions on IP protection, data localization, and fentanyl precursors.
• Tech permissions: Narrow licenses for specific mature‑node semiconductors or EDA features if China curbs critical exports (rare earths, graphite) and reins in industrial espionage.
• Energy & agriculture: Large LNG and farm purchase commitments to shrink the trade gap and anchor long‑term contracts for U.S. producers.
• Security channels: Re‑opening military hotlines and maritime incident rules to reduce risk around Taiwan and the South China Sea.

Deal Shapes That Would Favor the U.S.

1. Enforcement‑first mini‑deal: A narrow pact with measurable timelines (60–180 days) on IP, data access for U.S. firms in China, and fentanyl control—paired with snap‑back tariffs for non‑compliance.
2. Supply‑chain insurance: A framework letting U.S. multinationals shift sensitive nodes (AI chips, advanced optics, EV batteries) to allied hubs while keeping consumer goods trade open.
3. Energy‑for‑tech trade: Chinese commitments on U.S. LNG and ag buys in return for limited, tightly licensed access to mature‑node tools—without touching cutting‑edge AI hardware.

Implications for Global Supply Chains

Short term, companies should prepare for continued friction: extended permit regimes, audits, and possible shipping delays near new tariff deadlines. Medium term, we expect accelerated “ally‑shoring” to South Korea, Japan, Taiwan, and Southeast Asia, with Mexico as the near‑shore winner for consumer electronics and auto components. Logistics networks will rebalance toward ports on the U.S. Gulf and East Coasts to handle more LNG and container traffic.

Where the U.S. Economy Is Heading

• Manufacturing build‑out: CHIPS‑adjacent fabs, packaging, and grid‑tied data centers continue to absorb capex. Construction outlays likely stay elevated into 2026.
• Energy: Additional LNG final‑investment decisions and transmission upgrades support industrial power demand, with AI data centers as the incremental load.
• Inflation & rates: Trade frictions keep goods inflation sticky, but improved supply‑chain resilience reduces volatility. The Fed can cut cautiously if growth holds.

What to Watch in Busan

• Signals on tariff pacing and carve‑outs
• Any new export‑control designations or licensing pathways
• Concrete fentanyl‑precursor enforcement steps
• Restart of military‑to‑military crisis hotlines

Sources

Official statements and reporting on the planned Trump–Xi meeting next Thursday in Busan, South Korea; plus analysis of recent tariff and export‑control actions and allied coordination.