Trump–Xi Summit: Wang Yi Sets Terms in Talks with Marco Rubio

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As Foreign Minister Wang Yi and Secretary of State Marco Rubio speak by phone, both sides signal de-escalation ahead of a Trump–Xi meeting in Gyeongju.

By TRH Foreign Affairs Desk

New Delhi, October 27, 2025 — The world may be witnessing a rare moment of diplomatic calm between the United States and China. On Monday, Chinese Foreign Minister Wang Yi held a telephone conversation with U.S. Secretary of State Marco Rubio, marking the first substantive dialogue between the two sides since the latest flare-up in trade tensions.

In a strikingly conciliatory tone, Wang described Presidents Xi Jinping and Donald Trump as “global leaders whose long-term interactions and mutual respect have become the most valuable strategic asset in China–U.S. relations.” He emphasized that if both nations “faithfully implement the understandings reached by the two Presidents” and adhere to the principles of equality, respect, and mutual benefit, relations could “stabilize and move forward.”

According to officials, the two countries have reached a framework for a trade deal, with China’s top negotiator Li Chenggang confirming a “preliminary consensus.” Markets rallied on the news, and analysts such as Scott Bessent now expect Beijing to delay its rare earth export curbs by a year — a significant signal of goodwill from a nation that dominates the supply of critical materials.

Gyeongju: The World Watches Trump and Xi

The next test of this fragile truce will come at the Trump–Xi meeting scheduled in Gyeongju, the ancient Korean capital, where the two leaders are expected to finalize trade terms. The Economist, in its latest issue, warned that “continued trade wars will make both America and China poorer — and the rest of us.”

Yet, as the magazine observed, “no one should fool themselves: if Trump continues the trade wars, China will win.” The reasons, it argues, are structural and psychological.

China’s Strategic Edge

First, China has mastered “escalatory dominance.” It has shown the ability to absorb American tariffs while responding with targeted retaliation that inflicts political pain. When Trump levied tariffs on Chinese container ships, Beijing imposed its own port charges. When the U.S. restricted soybean exports, China turned to Brazil and Argentina, reshaping a $12 billion agricultural market and striking at Trump’s Midwestern voter base.

Second, China is redefining global trade norms. Even as its exports to the U.S. fell 27%, its overall exports grew by over 8%, reflecting a deliberate pivot toward Asia, Africa, and Latin America. Its control over rare earths—essential to Western manufacturing—gives Beijing immense strategic leverage.

Third, China’s societal resilience remains unmatched. As The Economist notes, “the Chinese people have a more recent experience of suffering and hard times.” While over half of Americans now distrust their government, the vast majority of Chinese citizens express faith in theirs. This unity, Beijing believes, is its ultimate economic armor.

America’s Political Test

For Trump, the upcoming summit offers both risk and opportunity. “We can work out a lot of our questions and our doubts,” he said, adding that the U.S. and China share a “tremendous asset together.” But as the Atlantic Council’s Nicholas Burns warns, “In a negotiation like this, neither Trump nor Xi will make an agreement where they turn out to be the loser. It’s become a test of wills.”

That test will play out not only in Gyeongju’s conference halls but across global markets, where every phrase and handshake could sway trillions.

A Moment to Reset?

For now, the rhetoric has softened. Wang Yi’s call for dialogue and restraint suggests Beijing wants stability before escalation. Whether this detente lasts will depend on how both leaders interpret “mutual respect” — as a shared goal or a strategic pause.

Either way, the world will be watching closely when Trump and Xi meet — because when the world’s two largest economies talk peace, the rest of the planet listens.

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