GYEONGJU – Delegates from 21 nations in the Asia-Pacific region are gathering for their annual summit beginning Friday, aiming to enhance economic collaboration and address mutual challenges. This meeting follows a pivotal discussion between U.S. President Donald Trump and China’s President Xi Jinping, where they pledged to ease the tensions of their escalating trade dispute.

This year’s Asia-Pacific Economic Cooperation (APEC) summit, held over two days in Gyeongju, South Korea, has been significantly influenced by the Trump-Xi negotiations. Trump hailed the talks as a major victory, announcing a reduction in tariffs on China, while China committed to exporting rare earth materials and resuming purchases of American soybeans.

The agreements reached by Trump and Xi have provided a measure of relief to the global economy, as many experts had predicted that continued trade friction between these economic powerhouses would exacerbate global economic instability.

APEC, founded in 1989 amid a surge of globalization, accounts for over half of global trade. The forum advocates for unrestricted trade and investment to boost regional economic integration and serves as a platform for countries to collaborate on shared initiatives, despite not issuing binding resolutions.

The APEC region is currently grappling with issues such as strategic rivalry between the U.S. and China, supply chain fragility, demographic shifts, and the impact of artificial intelligence on employment. The U.S. has shifted its focus to economic competition with China, as evidenced by Trump’s tariff increases and “America first” policy, which have unsettled markets and posed challenges to the principles of globalization and international cooperation that have been in place for decades.

“The global free trade order is facing various challenges. We hope that the APEC, which is being held in South Korea for the first time in 20 years, will provide an opportunity for leaders to have candid discussions and exchange views on the future of APEC,” South Korean Foreign Minister Cho Hyun told reporters Thursday.

Trump left South Korea after his meeting with the Chinese president, and international media spotlight is now on Xi, whose government has portrayed itself as a defender of free trade and an alternative to U.S. protectionism.

It’s Xi’s first visit to South Korea in 11 years, and he’s scheduled to meet South Korean President Lee Jae Myung and new Japanese Prime Minister new Japanese Prime Minister Sanae Takaichi separately on Friday.

Despite Trump’s optimism after a 100-minute meeting with Xi, there continues to be the potential for major tensions between the countries, with both seeking dominant places in manufacturing and developing emerging technologies such as artificial intelligence.

“It is certainly a contribution to bring the leaders of the two largest economies together for a meeting where they agreed to withdraw their most extreme tariff and export control threats. As a result, worst-case outcomes for global trade were averted,” said Leif-Eric Easley, professor of international studies at Ewha Womans University in Seoul.

“However, APEC is meant to be more than a venue for a trade war truce,” Easley said. “Greater multilateral efforts are needed to address the region’s most pressing economic challenges, including resisting costly and destabilizing protectionism, harmonizing regulations for sustainable trade, and coordinating standards for digital innovation.”

South Korean officials said they’ve been communicating with other countries to prod all 21 members to adopt a joint statement at the end of the summit so as not to repeat the failure to issue one in 2018 in Papua New Guinea due to U.S.-China discord over trade.

South Korean Foreign Minister Cho Hyun said last week that issuing a joint statement strongly endorsing free trade would be unlikely because of differing positions among APEC members. He instead anticipated a broader declaration emphasizing peace and prosperity in the region.

As host nation, South Korea places a priority on discussing AI cooperation and demographic challenges such as aging population and low birth rates, under the theme “Building a Sustainable Tomorrow: Connect, Innovate, Prosper.” South Korean officials say APEC members will share exemplary cases of responses to AI and demographic issues, explore common steps and formulate new growth strategies during this week’s summit.