US President Joe Biden and Chinese President Xi Jinping warned of turbulent times during a closely watched Asia-Pacific summit in Lima, Peru, this week. Both leaders expressed concerns over the prospect of global trade and political stability when former President Donald Trump prepares for a possible return to the White House.
The two men discussed delicate issues, including their risks, against a backdrop of increasing tensions between the U.S. and China during a week-long Asia-Pacific summit in Lima, Peru, close to where both countries’ top diplomats met briefly on an issue likely to be at the center of their talks.
Leaders Express Concerns Over Growing Tensions
The APEC summit in Lima will have representation by more than 40% of world commerce and 60% of world GDP from 21 member economies. Both Biden and Xi can be said to have expressed their uneasiness at international affairs taking the wrong turn with the possibility of the return of Trump as president in January looming large.
Xi elaborated on those risks at a meeting of CEOs and said he sees the opening up of global trade as “an inherent part of spreading unilateralism and protectionism” and therefore fears a “fragmentation of the world economy.” The full significance of that concern, of course, falls into an even broader story about China’s rising unease with growing isolationist policies emanating from the West, particularly the United States.
Meanwhile, Biden characterized this moment in the world as a particularly critical time of political shift. Addressing leaders from Japan and South Korea, Biden reflected on the trilateral partnership by saying, “We have to make sure it lasts as a lasting alliance in Asia.”
Tensions Over Trade and North Korea Loom Large
The two leaders will attend the summit at a sensitive time with increased global trade tensions and rising instability in world geopolitics. U.S. President Biden clearly stated that increased cooperation between North Korea and Russia holds dangerous risks, such as possible involvement in the Ukraine conflict ongoing. According to him, it was a necessity to be able to prevent North Korea from making the region even more unstable than it already is.
The summit, intended to start discussing trade and inclusive growth, has been overshadowed by the political uncertainty of where Trump’s future policy directions lie. Trump signalled his plans for taking an aggressive stance on China by proposing up to 60% tariffs on Chinese imports due to claimed imbalances.
It has been at the receiving end of Trump’s “America First” policy that wishes to reduce US reliance on foreign imports and protect American jobs. Economists, however, argue that this development could harm not only China’s economy but also that of the US and its trading partners.
Biden and Xi Push for Diplomacy Amid Rising Nationalism
South Korea’s leaders briefed Yoon Suk Yeol, the president of South Korea, separately on what is required for regional cooperation for “stability and peace.” Technically still at war with North Korea, more posturing from Pyongyang heightens risks for volatile tensions in the region.
National Security Adviser Jake Sullivan said the in-person meeting Saturday between Biden and Xi would focus on the management of the time of delicate transition, adding on the progress made in the bilateral relationship. Still, he stressed a point that needs to be handled concerning competition with China, so it doesn’t spin out of control into direct conflict.
The ‘America First’ agenda of President Trump cast a shadow over the bilateral relationship.
Now that Trump is poised to re-enter the White House come January, the APEC summit acquires added importance. What Trump’s “America First” agenda has signalled so far is a drift away from multilateral diplomacy, at least as far as international trade and climate change are concerned. In contrast, Biden’s approach seems to focus more on alliances and collective action in response to global challenges.
Therefore, the Biden administration focuses its attention on rearranging the relationship with historic friends, especially on this count, by rebuilding relations with Japan, South Korea, and the European Union. Notably, however, Trump’s policies have also ushered in tensions in major relations with allies and doubts about the long-term sustainability of international partnerships.
Threats from Rising Economic and Geopolitical Risks
Rising Protectionism under Trump The new threat to global trade with Trump in the second term is the threat of rising tariffs and protectionist policies. Proposed tariffs under Trump will hurt not only China but also the US and other economies, potentially causing a global economic downturn. On top of that, trade, Trump’s reluctance to engage in foreign conflicts could drive America toward a more isolationist stance further complicating global diplomacy.
In the meanwhile, China has cranked up its military efforts, particularly in growing assertiveness in the South China Sea and putting immense pressure on Taiwan. Thereby, raising geopolitical risk, which will have immense implications for regional stability as well as the world at large.
Conclusion of APEC and World Trade
Behind the scenes of tremendous political uncertainty, the APEC summit went on, with Trump signaling a great intent to harden up on China, leaving the future of global trade relations blurred. For all the attention on Trump moving to a new office, the delicate balance of global cooperation will face a test at a historic juncture.
Economists and policymakers in general are keenly following the post-summit debate to see whether such debate translates into concrete steps toward reducing trade tensions and avoiding further economic fragmentation. The outcome of such talks may define the face of the global economic landscape for a long period ahead.
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