Optimism is rising that President Trump and Chinese President Xi Jinping might be able to de-escalate recent tensions when they meet in South Korea on Thursday.

The positive sentiment lifted U.S. financial markets on Monday and sparked confident vibes from Trump himself, who said about the forthcoming meeting, “I really feel good."

The problem, of course, is that any unexpected snag or contretemps would confound those hopes and have a correspondingly negative effect on markets that have now priced in a more desirable outcome.

The array of economic issues at stake is dizzying, but the basic context for the Trump-Xi meeting is a relationship that has been vexed by recent tension.

Specifically, China tightened export controls on rare earth minerals earlier this month after the Trump administration had sought to curb China’s access to some American technology. Rare earths are vital for the manufacture of numerous products, from airplanes and missiles to more general tech.

A furious Trump complained, in an Oct. 10 social media post, that China’s position was “extraordinarily aggressive” and “extremely hostile.” By way of retribution, he threatened to impose a 100 percent tariff on Chinese goods “over and above any Tariff that they are currently paying.”

Since then, there has been a scramble on both sides to ease the friction created. The most tangible example so far is the agreement........

© The Hill