Trump lands in South Korea, says Xi talks will be 'great outcome for world'

Highlights:

• US president makes final stop on Asia trip
• Meetings with China's Xi, South Korea's Lee expected
• Trump expects to cut China tariff related to illicit fentanyl trade
• North Korea test-fires missiles ahead of Trump visitReuters Live:

US President Donald Trump landed in South Korea on Wednesday for the final leg of his Asia trip, optimistic about striking a trade war truce with Chinese President Xi Jinping after summit talks with South Korea's Lee Jae Myung.

Arriving from Tokyo hours after North Korea test-fired a nuclear-capable cruise missile, Trump is due to address a summit of CEOs and meet with Lee in Gyeongju, a sleepy South Korean town filled with historic tombs and palaces.

The main item on Wednesday's agenda will be the unresolved trade agreement between the US and South Korea, before an expected meeting with Xi on Thursday, the prospect of which has already buoyed global markets.

Speaking to reporters aboard Air Force One en route to Gyeongju, Trump dismissed the North Korea missile test and said he was squarely focused on his meeting with the leader of the world's second-largest economy.

"The relationship with China is very good. So I think we're going to have a very good outcome for our country and for the world, actually," Trump said.

He expects to reduce US tariffs on Chinese goods in exchange for Beijing's commitment to curb exports of fentanyl precursor chemicals, he added. The US could halve the 20% levies on Chinese goods it currently charges in retaliation for the export of such chemicals, the Wall Street Journal reported.

After arriving in the southern city of Busan, Trump was greeted by officials and a cannon salute on the red carpet, before a band struck up a rendition of Village People's YMCA, a favourite of the US president's often played at his rallies. He was then whisked to Gyeongju in his helicopter.

SOUTH KOREA TRADE TALKS STRUGGLE

Trump made no mention of trade talks with South Korea on Wednesday, with both sides playing down the prospect of a breakthrough in leader talks.

The two allies announced a deal in late July under which South Korea would avoid the worst of the tariffs by agreeing to pump $350 billion of new investments into the United States. But talks over the structure of those investments have been deadlocked.

Trump has also pressed allies like South Korea to pay more for defence, and South Korea has sought reforms to US immigration laws to allow for more workers to build factories after a raid on a Hyundai Motor battery plant in Georgia.

The leaders will discuss trade, investment and peace on the Korean peninsula at talks on Wednesday, Lee's office said, a reference to engagement with North Korea.

Trump has made repeated calls for a meeting with North Korean leader Kim Jong Un, including during this trip, but there has been no public comment from Pyongyang. Kim has previously said he could be open to talking if Washington stops pressing him to give up nuclear weapons.

Adding to the golfing gifts he received from Japan's leader in Tokyo on Tuesday, Lee will present Trump with a replica gold crown and award him with the "Grand Order of Mugunghwa", the country's highest decoration.

A "golden dessert" is on the menu for their working lunch, Lee's office said.

TAIWAN ON THE AGENDA?

Skipping the main APEC summit, Trump will address the APEC CEO summit, have dinner with Lee and hold bilateral meetings with several countries' leaders, including China's Xi, before departing on Thursday.

Negotiators from the world's top two economies hashed out a framework on Sunday for a deal to pause steeper American tariffs and Chinese rare earths export controls, US officials said. The news sent stocks soaring to record peaks.

Taiwan Foreign Minister Lin Chia-lung said on Tuesday he was not worried that Trump would "abandon" the island in his meeting this week with Xi.

Since taking office in January, Trump has vacillated on his position towards China-claimed Taiwan as he seeks to strike a trade deal with Beijing. Trump says Xi has told him he will not invade Taiwan while the Republican president is in office, but Trump has yet to approve any new US arms sales to Taipei.

China said on Wednesday it "absolutely will not" rule out using force over Taiwan.

Trump told reporters on Wednesday that he did not know whether he would even discuss Taiwan with Xi.

FINAL STOP IN ASIA TRIP

Trump's trip to South Korea concludes a whirlwind swing through the region, among the hardest hit by his tariff policies and increased US-China competition.

In Malaysia, he announced a slew of trade agreements and oversaw the signing of an expanded truce between Thailand and Cambodia after a border conflict.

In Tokyo on Tuesday, Trump lavished praise on Japan's first female Prime Minister Sanae Takaichi, welcoming her pledge to accelerate a military buildup and signing deals on trade and rare earths.

The US and Japan also released a list of projects in which Japanese companies are eyeing US investments, related to Tokyo's pledge earlier this year of $550 billion in strategic US investments, loans and guarantees in exchange for tariff reprieve.

Washington has pressed South Korea to make a similar arrangement, but Seoul says it cannot afford to pay the $350 billion it pledged upfront. Instead, South Korea has offered a mix of phased investments, loans and other measures.

On Tuesday, South Korean Foreign Minister Cho Hyun said a last-minute concession by the United States could lead to a deal.