The attendance of U.S. President Donald Trump and Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju at the end of October is coming into focus. The U.S. Embassy in Seoul has officially confirmed President Trump's visit, and Foreign Minister Cho Hyun also expressed confidence that Xi will visit South Korea. It will be the first time in 13 years that both leaders visit simultaneously. Key leaders from other major countries whose decisions will have a decisive impact on South Korea's economy and security, including Japan's new prime minister to be determined early next month, will gather. South Korea will thus become the stage for a massive diplomatic event that could influence the direction of the international order.

This APEC meeting takes place at a crossroads, as it will determine whether the trade war between the United States and China, which began shortly after the start of President Trump's second term, will be resolved. The summit opens 10 days before the expiration of the U.S.-China tariff truce and could mark a turning point if the leaders meet face-to-face to negotiate changes to the global trade order. In such a scenario, South Korea's position could be strengthened, balancing close security and economic ties with the United States while maintaining economic cooperation with China.

However, there are significant hurdles to overcome before APEC. Most notably, tariff negotiations between South Korea and the United States over the $350 billion U.S. investment fund remain deadlocked. Meeting all U.S. demands to conclude the negotiations could push the South Korean economy toward a foreign currency liquidity crisis. At the same time, delaying the talks is not an option. If South Korea continues to face higher tariffs than competitors such as Japan, major exports like automobiles could suffer severe damage. Finding a way to break the impasse is critical.

APEC could also serve as a steppingstone for addressing North Korea's nuclear program. While a North Korea-U.S. summit remains possible, President Trump's perceived acceptance of North Korea's nuclear arsenal is a variable. In an interview published Sept. 18 in Time magazine, President Lee Jae-myung outlined a three-step approach in which North Korea would be rewarded for halting its nuclear and missile development, followed by disarmament and complete denuclearization. Close coordination between South Korea and the United States is necessary to prevent misalignment. It will also be important to persuade China to clearly express its support for denuclearization before any South Korea-China summit during APEC.

"We will work with the United States, but we must manage our relationship with China to avoid hostility," Lee said in the interview, signaling his intent for South Korea to serve as a "bridge" between the two powers. Achieving this will require three elements: removing uncertainty in South Korea-U.S. relations, restoring trust with China, and securing U.S.-China agreement on a denuclearization plan. With 42 days remaining until APEC, an all-out diplomatic effort is essential to lay this groundwork.

APEC Summit tests South Korea's strategic balancing act