South Korea Balances U.S., China Ties as APEC Navigates Rivalry

The 2025 Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, South Korea, unfolded against a backdrop of shifting global trade dynamics, as U.S. President Donald Trump's decision to skip the main economic leaders' meetings allowed Chinese President Xi Jinping to amplify China's role as a defender of multilateralism and open trade. Trump's absence, coupled with his earlier bilateral meeting with Xi in Busan, underscored the intensifying U.S.-China economic rivalry and highlighted regional efforts to navigate the fallout.

Trump's truncated participation came after he finalized a contentious trade deal with South Korea, agreeing to lower tariffs in exchange for a $350 billion investment pledge from Seoul, according to Yonhap. The U.S. leader also struck a temporary ceasefire with Beijing, suspending a 100% tariff threat on Chinese goods while China agreed to delay rare earth export restrictions and resume soybean purchases from U.S. farmers, according to Bitget. However, Trump's early departure left APEC host South Korea and other member economies to grapple with the absence of the world's largest economy, a void China swiftly sought to fill.

Xi's presence dominated the summit, with his administration leveraging the platform to counter U.S. protectionist policies and reassert China's commitment to "safeguarding the multilateral trading system," according to ABC News. ABC News also noted that Chinese officials emphasized collaboration on artificial intelligence governance, demographic challenges, and supply chain resilience, themes central to South Korea's APEC agenda. The strategy aligns with Beijing's broader push to solidify economic ties in the Asia-Pacific, exemplified by an upgraded China-ASEAN free trade agreement signed by Premier Li Qiang just days before the summit, according to MarketScreener.

Regional leaders capitalized on the shifting dynamics. Canada's newly elected Prime Minister Mark Carney met with Xi to advance trade diversification efforts, aiming to double non-U.S. exports over the next decade. The discussions focused on easing tariffs for Canadian canola—a $5 billion industry facing a 75.8% Chinese duty—and expanding market access for clean technology and critical minerals, according to Meyka. Meanwhile, South Korean President Lee Jae Myung balanced bilateral talks with Trump and Xi, securing a U.S. tariff reduction while separately engaging Beijing on economic cooperation, as Yonhap had reported.

The APEC summit also witnessed progress on multilateral outcomes. After years of deadlock, member economies neared consensus on a joint declaration addressing protectionism, digital innovation standards, and supply chain vulnerabilities, according to Reuters. South Korean officials stressed the importance of avoiding a repeat of the 2018 and 2019 deadlocks, when U.S.-China tensions derailed unified statements, according to U.S. News. The declaration, however, is expected to be a diluted version of earlier aspirations, reflecting divergent priorities among members, according to Al Jazeera.

Corporate partnerships further underscored the region's economic ambitions. Nvidia CEO Jensen Huang announced collaborations with Samsung, Hyundai, and SK Hynix to advance AI infrastructure, robotics, and self-driving technology, positioning South Korea as a hub for next-generation innovation, according to Republic World. Republic World also reported that Huang hinted at potential U.S. approvals to resume AI chip sales to China, though he acknowledged Trump's authority to decide on advanced Blackwell chip exports.

As the summit concluded, the interplay of U.S. retrenchment and Chinese assertiveness left regional economies navigating a complex landscape. While China's diplomatic outreach and trade agreements reinforced its influence, analysts noted the limitations of bilateral deals in countering the U.S.'s economic scale, according to Investing.com. For now, APEC's focus on resilience and cooperation offers a fragile but necessary framework for stabilizing global trade amid escalating geopolitical tensions.