Much is on the line for South Korea as world leaders convene for APEC summit

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Much is on the line for South Korea as world leaders convene for APEC summit

Published: 24 Oct. 2025, 07:00

SEO JI-EUN
[email protected]

Audio report: written by reporters, read by AI

Staff conduct final inspections at the HICO Convention Center in Gyeongju, North Gyeongsang, on Oct. 23, a week ahead of the 2025 APEC Economic Leaders’ Meeting. [NEWS1]

The Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting returns to South Korea next week for the first time in 20 years, and the usually economy-focused forum is taking on outsized diplomatic and security implications.

Held in the historic city of Gyeongju in North Gyeongsang, the gathering is expected to see 21 world leaders, including U.S. President Donald Trump and Chinese President Xi Jinping, under the theme “Building a Sustainable Tomorrow.”

The APEC CEO Summit will take place from Oct. 29 to 31, alongside the ministerial meetings on Oct. 29 to 30. The Economic Leaders’ Meeting will take place from Oct. 31 to Nov. 1 and is expected to draw around 20,000 delegates, executives and officials — marking the first major multilateral diplomatic event hosted in Korea under President Lee Jae Myung's leadership.

Amid great-power rivalries, Seoul faces the complex task of courting Washington’s favor amid tough trade talks.

Key bilateral agendas at the 2025 APEC Economic Leaders' Meeting [NAM JUNG-HYUN]

In a CNN interview on Thursday, Lee expressed confidence that Korea and the United States "will be able to reach a rational result because we are an alliance and both have common sense and rationality."

There are also challenges of balancing Beijing’s presence, nurturing Tokyo’s friendship and managing Pyongyang's menace — all while advancing this year's APEC agenda of digital innovation and demographic challenges.

The question for South Korea and its APEC partners is whether they can bridge that divide and reaffirm open cooperation in the face of fracture, or whether this summit will simply mirror the “new normal” of a divided world. The outcomes in Gyeongju will have repercussions far beyond Korea’s shores, marking perhaps the most pivotal moment in Asia-Pacific diplomacy this year.

President Lee Jae Myung, left, and U.S. President Donald Trump shake hands during a Korea–U.S. summit at the White House in Washington on Aug. 25. [PRESIDENTIAL PRESS CORPS]

Washington: A breakthrough in tariff talks?

For host nation South Korea, following up with the United States will be at the top of the agenda during the whirlwind APEC gathering.

Trade, including a stalled tariff and investment deal, has become the thorniest issue in bilateral relations lately.

Washington had imposed steep 25 percent tariffs on South Korean automobiles — a rate the two sides are now negotiating to reduce to the 15 percent level it set for other trading partners, as leverage to extract a massive South Korean investment commitment.

Seoul bristled at an initial U.S. demand for an “upfront” $350 billion investment — largely equity stakes — fearing it would destabilize Korean export markets.

Seoul recently dispatched senior negotiators to Washington for urgent talks aimed at closing the gap on this deal before the APEC gathering.

Progress has been made, with U.S. officials reportedly dropping the entire payment demand in cash. Both sides are exploring an agreement to be announced when the two leaders meet in Gyeongju.

Professor Min Jeong-hun of the Department of American Studies at the Korea National Diplomatic Academy said that Trump will likely "seek tangible achievements from his multinational trip to Asia," thus the tariff negotiations are highly likely to be finalized at the Korea-U.S. summit.

“The two leaders could give a final ‘OK’ at their Oct. 29 meeting and issue a fact sheet summarizing agreed items on economic and trade issues, even if not a full joint statement,” Min said.

According to diplomatic sources, the security-related provisions, already agreed upon, are pending announcement. They are expected to include commitments to "modernizing" the alliance, maintaining current defense cost-sharing levels and strengthening Korea’s rights to enrich and reprocess nuclear materials for civilian energy purposes.

Foreign Minister Cho Hyun said on a radio interview on Thursday that Seoul “plans to begin negotiations soon,” adding that to produce its own fuel at the industrial level, it needs to enrich uranium and reprocess and reuse materials, and that the government made that point "very strongly" to the United States, which accepted it. His remarks suggest that Washington has signaled its understanding of Seoul’s request for greater autonomy in both enrichment and reprocessing.

From left, Russian President Vladimir Putin, Chinese President Xi Jinping, North Korean leader Kim Jong-un and heads of foreign delegations emerge onto a rostrum in Tiananmen Square, Beijing, China, on Sept. 3. [UPI/YONHAP]

Beijing: Seeking a reset amid strategic squeeze

South Korea’s president will also host Chinese leader Xi Jinping, who is coming to Korea for the first time in 11 years since a Chinese president made a state visit to Seoul.

Seoul had initially hoped to treat Xi’s trip as a grand state visit to improve the chilly Korea-China relationship, but intense U.S.-China rivalry and China’s alignment with North Korea have complicated the picture.

Even so, the Korea-China summit on the sidelines is a critical opportunity.

Relations between Seoul and Beijing have been strained since 2016, when South Korea and the United States agreed to deploy the U.S.-led Terminal High Altitude Area Defense (Thaad) antimissile system. The system was installed the following year and angered China.

Beijing responded with informal economic sanctions, including a ban on Chinese tour groups and tight restrictions on Korean entertainment exports, known as the Hallyu ban.

Those punitive measures, though never officially acknowledged, have yet to be fully lifted, stifling exchanges. Seoul will be looking for signs of goodwill from Xi to roll back these informal sanctions and restore normal people-to-people and cultural ties.

Economically, South Korea is also hoping to shore up supply chain cooperation with China even as it aligns closer with the United States on high-tech security measures. Lee will likely discuss stabilizing the supply of critical minerals and components, especially since China’s rare earth gambit affects Korean industries too.

Maintaining a balance is tricky, with middle powers like South Korea “focused on negotiating trade deals with Washington while managing economic exposure to Beijing,” according to a report from Brookings — essentially, hedging their bets.

Japan's new Prime Minister Sanae Takaichi speaks during a press conference at the prime minister's office in Tokyo, Japan, on Oct. 21. [AP/YONHAP]

Tokyo: A fragile reconciliation on display

Also in the spotlight is the first encounter between Lee and Japan's hawkish new prime minister, Sanae Takaichi, following the recent leadership change. Lee aims to sustain pragmatic cooperation while managing potential nationalist impulses from Japan’s new conservative leadership.

Korea-Japan ties hit rock bottom in 2019 amid disputes over historical issues and trade retaliation, but recent years saw a remarkable turnaround.

Still, the rapprochement remains fragile.

Known for her nationalist and hard-line conservative views, Takaichi has long aligned herself with Japan’s right wing: she has defended controversial visits to the Yasukuni Shrine and voiced skepticism about Japan’s wartime culpability.

While she pledges to strengthen the U.S.–Japan alliance and maintain regional stability, her ideological stance could reignite historical sensitivities with Seoul, particularly on forced-labor and wartime memory issues.

At APEC, Lee and Takaichi's first bilateral meeting is expected to sustain the positive momentum and maintain the so-called "shuttle diplomacy," as both governments have signaled they intend to keep up the improved ties regardless of leadership changes in Tokyo or Washington, especially with this year marking the 60th anniversary of diplomatic normalization between the two.

North Korean leader Kim Jong-un, right, and U.S. President Donald Trump, left, converse during a summit at Panmunjom on Jan. 1, 2020. [YONHAP]

North Korea’s shadow

North Korea — though not an APEC member but a perpetually volatile neighbor — looms in the background of APEC week.

True to form, it fired multiple ballistic missiles for the first time since Lee took office on Wednesday, followed by a test of what appeared to be a hypersonic projectile on Thursday, barely a week before the summit.

Analysts viewed the moves as a display of force timed just ahead of the APEC gathering to underscore its commitment to gaining recognition as a nuclear weapons state.

Speculation has also arisen about a possible interaction between North Korean leader Kim Jong-un and Trump — a flashback to when Trump met Kim at the demilitarized zone (DMZ) in 2019.

U.S. officials have said Trump remains “open to talking with Kim without preconditions,” fueling rumors of a surprise meeting.

South Korea even quietly prepared by temporarily suspending tours to Panmunjom, the truce village in the DMZ, just in case a last-minute encounter was arranged.

Yet, some are skeptical that a Kim-Trump meeting will materialize on this trip.

Trump’s planned stay is too short to accommodate such high-stakes theatrics, barring an impulsive tweet-and-go as in 2019.

Moreover, it’s unclear if Kim is even interested now.

North Korea has rebuffed South Korea’s outreach and declared Seoul a “hostile” puppet state. Kim appears more invested in his partnerships with Putin and Xi lately than in re-engaging with Trump.

So far, Pyongyang remains silent, and the White House has downplayed the likelihood of any contact.

"I would like to say [to Kim] that meeting with your counterpart [Trump] and talking to him would be the first step in resolving many issues," Lee said in the CNN interview on the prospects of a reunion between the two.

U.S. President Donald Trump, left, shakes hands with China's President Xi Jinping during a meeting on the sidelines of the G-20 summit in Osaka, Japan, on June 29, 2019. [AP/YONHAP]

U.S.-China showdown

Even aside from Seoul's own involvement, all eyes are on the mere presence of both Washington's Trump and Beijing's Xi as the two major powers have traded economic blows that underscore their fraught relationship.

Earlier this month, China tightened its export controls on rare earth minerals — critical for semiconductors, electric vehicles and defense systems — in a move clearly aimed at the United States.

Trump answered with threats of sweeping tariffs, vowing to impose 100 percent duties on all Chinese imports starting next month, in addition to hefty existing tariffs. He also warned of new U.S. export curbs on critical software, escalating the tit-for-tat exchange.

Professor Min said the Trump–Xi meeting is likely to focus more on managing tensions than reaching substantive agreements, but even that would benefit Seoul.

“Korea is among the countries most affected by U.S.–China relations,” Min said.

“If the two sides continue dialogue, global economic uncertainty will ease and Korea’s trade conditions will improve," he added. "Conversely, if relations deteriorate, China could become less cooperative on the North Korea issue, but if ties are managed, it would also help stabilize the Korean Peninsula.”

APEC 2025 Korea logo [SCREEN CAPTURE]

Trade order on the line

While trade liberalization remains the founding principle of APEC, reaching a consensus among member economies has become increasingly difficult amid intensifying U.S.–China rivalry and the spread of protectionist sentiment.

Mininster Cho said that the upcoming “Gyeongju Declaration” will focus on safeguarding peace and prosperity in the Pacific region, acknowledging that free trade remains a "contentious issue." He added that two additional statements addressing cooperation on AI and demographic change are also expected to be adopted.

Given that the Trump administration has pursued aggressive tariffs and declared the end of traditional multilateral free-trade agreements, expectations for a breakthrough are modest. During Trump’s first term in 2018, APEC leaders failed for the first time to issue a joint communiqué after the United States and China clashed over trade wording.

Kim Jae-chun, professor of International Relations at Sogang University, said it will be difficult for the declaration to explicitly mention “free trade,” but noted that like-minded economies could still include indirect references to an “open economic order” or “enhanced international cooperation.”

“Although the Trump administration is shaking the multilateral framework, APEC member economies like Japan, Australia, Canada and Asean members still want to preserve a rules-based trading order,” Kim said. “For Korea, working together with these countries to deliver a forward-looking message [may be the most realistic approach.]”

BY SEO JI-EUN [[email protected]]