U.S. and Chinese leaders agreed to meet but an 'uneasy thaw'... Will the tariff war be resolved at APEC?

TikTok sale agreement was decisive in arranging the summit

China reaffirmed legal authority over TikTok's core technology

Tariffs, fentanyl, the Ukraine war... remaining contentious issues

U.S. President Donald Trump and Chinese President Xi Jinping have agreed to meet at the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju in October, raising expectations that tensions between the two countries may ease. With the two leaders reaching an agreement on the broad outline of the TikTok sale, which had been one of the points of contention between the U.S. and China, some view this as a first step toward resolving bilateral tensions. However, there remain issues such as tariffs and fentanyl for which clear solutions have not yet been found, leading many to view the situation as an "uneasy thaw."

Trump: "A very good conversation"

President Trump suggested on the 19th (local time) that, in addition to agreeing to meet at the Gyeongju APEC summit, there had been progress on issues where the two sides had previously differed. Speaking to reporters at the White House that afternoon, Trump said he had spoken with President Xi for nearly two hours and that it was "a very good conversation."

This call was the second since President Trump's return to office, following his first call in June, and the third call between the two leaders this year.

Trump also posted on Truth Social that he had "completed a productive call" with President Xi.

Xinhua News Agency reported that President Trump told President Xi that "U.S.-China relations are the most important bilateral relationship in the world," and that President Xi said "U.S.-China relations are very important" and that "both sides can achieve common prosperity." Xinhua also quoted President Xi as calling the call "positive and constructive."

Meeting achieved through TikTok approval

Diplomats say that the fact that Presidents Trump and Xi approved a preliminary agreement to transfer control of TikTok's U.S. operations to an investor consortium played a decisive role in making the leaders' meeting possible.

The Wall Street Journal (WSJ) reported on the 19th that U.S. investors would control TikTok's U.S. operations through a new company, and that the core algorithm would operate under a licensing framework using ByteDance's technology. This framework reflects national security concerns about a platform controlled by a Chinese company being used by 170 million Americans.

The WSJ, citing a White House official, reported that "the specifics of the agreement have not yet been made public, and legal issues and detailed conditions will need to be further coordinated to complete the complex transaction."

Under the new framework, the new TikTok investors together with existing investors would hold about 80%, and ByteDance's stake would be reduced to less than 20%. A proposal under discussion would have the new investor consortium, including private equity Silver Lake and Oracle, hold about 50%, while existing ByteDance investors such as KKR and General Atlantic would hold about 30%. People familiar with the negotiations say most of the new investors are at a confirmed stage.

According to Xinhua, President Xi expressed a favorable stance toward further negotiations on the TikTok deal while reaffirming China's legal authority over the app's core technology.

Xinhua quoted President Xi as saying, "The Chinese government respects the intentions of companies and welcomes solutions reached through commercial negotiations under market rules that comply with Chinese laws and regulations and balance stakeholders' interests." He also said he hopes the United States will create an "open, fair and non-discriminatory" business environment for Chinese companies.

An uneasy thaw

Although the meeting between Presidents Trump and Xi has been arranged, it is too early to be reassured. President Trump said there had been progress on many issues, including trade, fentanyl, the need to end the Ukraine-Russia war, and approval of the TikTok sale, but he did not provide specific details.

Xinhua reported that President Xi described the call with President Trump as "constructive," while emphasizing that "the U.S. side should avoid unilateral trade restriction measures." He also argued that "the U.S. side should avoid taking unilateral economic and trade restriction measures that would undermine achievements gained through multiple rounds of negotiations between the two sides."

There are also remaining points of contention regarding a ceasefire in Ukraine. President Trump said he discussed a ceasefire in Ukraine with President Xi, adding, "I think he (Xi) also really wants a ceasefire," and "I think he will now cooperate with us."

The U.S. has long criticized China for helping Russia's invasion of Ukraine by importing Russian oil and supplying raw materials needed for Russian weapons factories. Whether China will take a more progressive stance on this remains uncertain.

New York=Correspondent Park Shin-young nyusos@hankyung.com