South Korea is gearing up to host this year’s APEC forum in the southeastern city of Gyeongju, as the government of President Lee Jae Myung juggles delicate ties with its security partner the U.S. and giant neighbor China.

One of the biggest moments of the week could happen even before the two-day APEC leaders meeting opens on Friday: a long-awaited face-off between U.S. President Donald Trump and Chinese President Xi Jinping.

Here are five things to watch in the days ahead.

U.S.-China talks

Trump and Xi are expected to meet on Thursday, the day Xi is due to arrive and Trump is scheduled to leave South Korea. This would end weeks of speculation and could mark a step toward thawing frosty ties.

Last weekend in Kuala Lumpur, negotiators for the rival powers hammered out a “framework” of an agreement for the two leaders to discuss and consider finalizing, according to U.S. Treasury Secretary Scott Bessent. China was more circumspect, calling it a “preliminary consensus.”

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The Trump-Xi meeting would be their first face-to-face encounter since June 2019 and would come amid high tensions over tariffs, export controls, tit-for-tat shipping fees and other disagreements. The leaders are expected to touch on issues ranging from TikTok and rare earths to agricultural purchases, all of which came up in Malaysia.

Global stocks have been rallying on expectations for a truce, but some analysts remain cautious.

Shao Yuqun, a director at the Shanghai Institutes of International Studies, said the meeting “is unlikely to be groundbreaking” given structural problems in bilateral ties and limited scope for short-term adjustments in U.S. strategy toward China. “It’s very likely that the bilateral relationship will further deteriorate after the summit,” she warned.

A baseball field next to the Port of Los Angeles in California in May. Trump’s tariffs loom over the summit, as does his broader trade war with China.   © Reuters

Economists at Macquarie said that even if there is a detente this week, it would mean a continuation of the recent “escalate and de-escalate” pattern in the superpowers’ trade relationship.

Wu Xinbo, director at the Center for American Studies at Fudan University, expects the leaders to affirm what was discussed in Kuala Lumpur rather than negotiating individual trade issues in detail. He also expects messaging on how the sides will “manage bilateral diplomatic and security relations down the road,” especially on the Taiwan and South China Sea issues.

Wu said all this should help “stabilize this turbulent relationship.” But because China is reducing its dependency on the U.S. in key technologies like semiconductors, “the U.S. is still playing the old game while China is playing a new game,” he added.

A document China released in Xi’s name on Tuesday underscores Beijing’s determination to achieve self-sufficiency. Elaborating on the next five-year plan discussed at the Chinese Communist Party’s fourth plenum earlier this month, Xi stressed, “We must gain the strategic initiative amid fierce international competition, promote major breakthroughs in strategic tasks crucial to the overall development of China’s modernization, and ensure decisive progress in achieving socialist modernization.”

Other experts say China’s approach reflects lessons from the first Trump administration. “Beijing has learned that swift, tit-for-tat responses command respect,” said Daniel Kritenbrink, former U.S. assistant secretary of state. “Any agreement this year, even at the presidential level, will likely deliver tactical stabilization, not strategic transformation.”

Seoul’s China balancing act

South Korea’s Lee, who took office in June, also faces a high-stakes encounter with China’s Xi, who will be making his first trip to the country since 2014. The two neighbors have a fruitful trading relationship, but their political ties sometimes fray due to China’s competition with the U.S.

Seoul has found itself caught between the superpowers’ trade war. China recently implemented sanctions on five American subsidiaries of South Korean shipbuilder Hanwha Ocean, which it accused of aiding the U.S. In response to the allegations, Hanwha Ocean issued a statement saying it was monitoring the potential impact on its business.

South Korean President Lee delivers a speech during the 2025 APEC CEO Summit in Gyeongju on Oct. 29.   © Reuters

Anti-China sentiment is also growing in South Korea, with polls showing souring views of the larger neighbor and local media reports of virulent protests targeting neighborhoods with large ethnic Chinese populations. Many in South Korea’s key industries, like semiconductors, electronics and steel, worry about advancement by their Chinese rivals.

In Gyeongju, both countries will be more focused on their more urgent discussions with the U.S., wrote Lee Hee-ok, a China expert at Sungkyunkwan University in Seoul, in a recent column. “It is difficult to expect groundbreaking progress [in South Korea-China ties],” according to Lee.

Indeed, one of President Lee’s goals while he seeks to mend trade ties with Washington will be to avoid alienating Beijing.

South Korea-U.S. tariff negotiations

The South Korean hosts are going into the gathering under pressure to finalize a trade deal with the U.S. that would lower tariffs and ease the uncertainty hanging over their trade-dependent economy.

South Korean President Lee visited Washington in July, when he and Trump agreed to a deal under which the U.S. would lower tariffs from 25% to 15% in exchange for $350 billion worth of stateside investment by Seoul.

That agreement has not been signed, however, and South Korean officials have raised concerns that the terms could lead to a drastic depreciation of the won. In recent days, Lee and Trump have made divergent comments on the matter, with Lee saying key sticking points remain and a signing is not close, and Trump describing the deal as “pretty close to being finalized.”

Makers of South Korean automobiles, a key U.S.-bound export item, currently face a tariff of 25%, pressuring Lee to seal the deal. Yet he will also want to avoid rushing into a massive commitment.

“Lee’s position is clear — that he can’t accept an amount as big as $350 billion. He has to try to get that down to $200 or $250 billion, but even that would be too much,” Shin Se-don, an honorary professor of economics at Sookmyung Women’s University in Seoul, told Nikkei Asia.

“The key factor will be whether Trump is willing to step back from his stance,” Shin said.

Takaichi’s diplomacy

Japan’s new Prime Minister Takaichi will be looking to build on recently improved diplomatic ties with South Korea in talks with Lee. Their anticipated meeting will form part of an effort by Japan to deal with a more muscular China through closer partnerships with neighboring countries.

Despite his use of tough rhetoric about Japan in the past, Lee has shown openness to closer ties and had developed a positive rapport with her predecessor, Shigeru Ishiba. That has left Tokyo hopeful that Takaichi and Lee will be able to maintain the momentum.

Takaichi, known for her conservative worldview, has so far taken care to avoid language or moves that could upset victims of Japan’s past wartime aggression. In a policy speech last Friday, she made it clear that she intends to engage in top-level dialogue with Seoul to strengthen bilateral relations. She also said she will develop “minilateral” security partnerships centered around South Korea, the Philippines and Australia.

Japanese Prime Minister Takaichi reacts as U.S. President Trump speaks aboard the aircraft carrier USS George Washington in Yokosuka, Japan, on Oct. 28.   © Reuters

In the same address, Takaichi called the military activities of China, North Korea and Russia “a grave concern,” triggering a protest from Beijing. She has called for “frank dialogue” with China’s leadership, including Xi, to steer bilateral ties onto a stable and constructive trajectory. It remains to be seen whether Xi will respond and agree to sit down with her at APEC.

Takaichi will be attending the forum just after managing a major diplomatic event of her own — Trump’s visit to Japan.

Possible Trump-Kim reunion

Given Trump’s penchant for splashy diplomatic forays, the U.S. president, while in South Korea, might act on a long-simmering wish to rekindle ties with North Korean leader Kim Jong Un.

During Trump’s first term, he held two summits with the reclusive Kim, in 2018 and 2019, as well as an impromptu meeting at the inter-Korean border, becoming the first sitting U.S. president to set foot on North Korean territory.

Ever the showman, Trump has indicated he is keen for another headline-grabbing encounter. While on his way to Japan for the second stop of his Asia tour, Trump told reporters about a possible meeting with Kim: “If he’d like to meet, I’m around. I’ll be in South Korea, so I can be right over there.”

U.S. President Donald Trump and North Korean leader Kim Jong Un pose at a military demarcation line at the demilitarized zone (DMZ) separating the two Koreas on June 30, 2019. (KCNA via Reuters)

But Trump is dealing with a vastly different geopolitical landscape than he faced in his first term. North Korea has deepened ties with China and Russia and shown no interest in engaging with the U.S. Trump’s friendly words may not be enough to coax Kim this time.

“North Korea has experimented with working with liberal, capitalist countries, and there were times when it seemed like there were going to be breakthroughs,” Cheehyung Harrison Kim, a Korea expert at the University of Hawaii at Manoa, told Nikkei. “But Kim was burned by his first meetings with Trump and now feels like he can’t trust the U.S.”