CaliToday (23/10/2025): President Donald Trump projected broad optimism on Wednesday, suggesting he expects a wide-ranging series of agreements with Chinese President Xi Jinping when they meet next week, potentially covering everything from U.S. soybean sales to global nuclear arms control.
However, the president's upbeat, dealmaking tone stood in sharp contrast to the strident warnings of his own top economic officials. His Treasury Secretary and Trade Representative were simultaneously dispatched to Asia to "defuse tensions" over what they termed an "unacceptable" trade crisis, all while Washington quietly prepares a new wave of devastating export controls against Beijing.
This striking "good cop, bad cop" dynamic has injected massive uncertainty into the upcoming talks in South Korea, the first between the two leaders in Trump's second term, as the world's two largest economies teeter on the brink of a new, more damaging trade war.
Trump's Oval Office Optimism
Speaking to reporters in the Oval Office during a meeting with NATO Secretary General Mark Rutte, President Trump sounded confident.
"I think we'll make a deal," Trump declared, adding he believed President Xi was ready to cooperate on ending Russia's war in Ukraine, now in its third year.
"He would now like—I'm not sure that he did at the beginning he would now like that war to end," Trump said, noting he planned to discuss China's significant purchases of Russian oil.
Under pressure from his agricultural base, which is reeling from a collapse in Chinese orders, Trump specifically said he "expected to reach some agreement with Xi on the issue" of soybeans.
He also floated a far grander bargain: a nuclear arms deal. Trump noted that Russian President Vladimir Putin had raised the idea of a bilateral de-escalation, and "China could be added to that effort."
In a move that directly contradicted his administration's actions, Trump downplayed China's recent curbs on rare earth magnet exports a move that has roiled high-tech and defense markets. He dismissed the crisis as "a disturbance," insisting that tariffs remained the "more powerful" issue.
'Unworkable and Unacceptable': The View from the Cabinet
Trump's "disturbance" is being treated as an economic threat of the highest order by his own team. The trade relationship flared dramatically in recent weeks after China announced sweeping export controls on nearly all rare earths, a market it dominates. In response, the Trump administration slapped on new 100% tariffs, set to take effect on November 1.
Now, his top negotiators are in damage-control mode.
U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer were en route to Kuala Lumpur, Malaysia, on Wednesday ahead of an Association of Southeast Asian Nations (ASEAN) meeting. Their stated goal: to find an off-ramp before the Nov. 1 tariff deadline.
"This is China versus the globe. It's not just on the U.S.," Bessent told Fox Business Network, framing China's move as a global provocation. "This licensing regime that they've proposed is unworkable and unacceptable."
Bessent said the U.S. and its allies were "contemplating how to respond" if a deal wasn't reached.
"I'm hoping that we can get this ironed out this weekend so that the leaders can enter their talks on a more positive note," he added. In a classic diplomatic move to lower stakes directly undercutting Trump's grand-deal predictions Bessent described the planned Trump-Xi summit as a "pull-aside."
The Hammer Falls: A New Sanctions Threat
While Bessent and Greer carry the diplomatic message, officials in Washington are preparing the "stick."
Reuters reported earlier that the administration is actively considering a plan to curb a vast range of software-powered U.S. exports to China. The restrictions would cover everything from laptops to advanced jet engines, a retaliatory strike that would escalate the trade war from tariffs to a full-blown technological blockade.
This follows Trump's threat earlier this month to bar "critical software" exports to China.
Greer, speaking to CNBC, laid out America's grievances. He accused China of violating a direct commitment to keep supplying rare earths and of failing to meet its purchase obligations for U.S. agricultural and manufactured goods under the trade deal signed during Trump's first term.
"The U.S. has always been quite open to the Chinese, and it's really been driven by Chinese policies that exclude U.S. companies," Greer said. "We can't live that way anymore so we need an alternative path."
As this high-stakes economic drama unfolds, Trump is preparing for a whirlwind Asia tour. Following the ASEAN meeting in Kuala Lumpur, he is expected to stop in Japan to meet the new prime minister, Sanae Takaichi, before heading to Gyeongju, South Korea, for the Asia-Pacific Economic Cooperation (APEC) leaders' summit, where his "pull-aside" with Xi Jinping will determine if the world sees a grand bargain or a trade war.