The United States and China are set to hold trade talks in Seoul, South Korea, ahead of a planned summit between President Donald Trump and Chinese President Xi Jinping. US Treasury Secretary Scott Bessent is leading the American side in these discussions, which mark a notable step toward direct high-level engagement between the two largest economies.

What Is Being Negotiated

The Seoul meeting serves as preparatory groundwork before Bessent travels to Beijing, where broader talks are expected to continue. The choice of Seoul as a neutral venue suggests both sides want structured dialogue before committing to summit-level positions. No specific agenda items have been confirmed in available reporting, but the timing, ahead of a Trump-Xi meeting, signals these are substantive, not ceremonial, exchanges.

Bessent also plans to meet with Japan's prime minister and finance minister before heading to Beijing. That stop adds a trilateral dimension: Japan is a key US ally and a major trading economy deeply affected by any shift in US-China trade arrangements, including tariffs, supply chain rules, or currency dynamics.

Why This Matters

US-China trade tensions have shaped global supply chains, technology investment, and commodity prices for years. Any progress, or breakdown, in these talks can reprice sectors from semiconductors to agriculture almost immediately. The Seoul leg, combined with the Japan consultations, suggests Washington is coordinating with allies before sitting down with Beijing, a deliberate sequencing that could affect what concessions the US is willing to offer or demand.

A Trump-Xi summit, if confirmed, would be the highest-level engagement between the two countries in recent memory and could set the tone for trade policy heading into the second half of 2025. Markets tend to react sharply to signals from such meetings, especially on tariff levels, export controls, and access to Chinese markets for US firms.

Watch for any joint statements from Seoul or signals from the Japan meetings about allied coordination on China trade policy. The pace at which Bessent moves from Seoul to Tokyo to Beijing will itself indicate how much progress is being made at each stop.