LONDON — As the world watched closely, Chinese President Xi Jinping and U.S. President Donald Trump met face-to-face in Busan, South Korea, on Thursday — their first encounter in six years — and reached agreements aimed at easing trade frictions and resetting U.S.–China economic tensions.
The leaders of the world’s two largest economies agreed to reduce tariffs on Chinese imports, maintain rare-earth exports, strengthen fentanyl control, and for China to resume U.S. soybean purchases.
After the one-hour-and-40-minute meeting, the two men walked out amicably, and Trump escorted Xi to his car.
A briefing published on Chinese state media said that both parties had reached a consensus on major trade issues, and Xi urged the refinement and finalization of follow-up deliverables to implement the agreement.
“Economic and trade cooperation should continue to serve as the ballast and propeller of bilateral ties, rather than a stumbling block or source of conflict,” wrote the Chinese briefing.
This first face-to-face meeting with Xi since Trump’s first term was a key part of the American president’s weeklong Asia trip. He has since returned to the U.S.
Earlier in the week, Trump signed a series of agreements ranging from trade, rare-earth minerals, to defense spending, with Japan’s newly elected Prime Minister Sanae Takaichi and South Korean President Lee Jae Myung.
It’s not just the traders and investors on both sides of the Pacific who are anticipating whether a truce with China would ease months of trade tensions. Global luxury brands were also hoping for a positive outcome, as it could greatly boost spending and consumer confidence in a market that has been crucial to all players in the sector over the past decade.
One cannot ignore how a mood swing could help improve spending in a market that has caused drastic management and creative changes in the world of fashion.
To wit, China has some of the highest private savings in the world, and the nation’s middle class only tends to splurge on luxury items when they feel safe about the future.
Patriotism — fueled by advanced weapon displays during the military parade in Beijing on Sept. 3, a celebration of the 80th anniversary of the end of the Second Sino-Japanese War and the Second World War, and a wider range of consumption stimulus packages issued by Beijing over the three months — has helped the Shanghai Composite Index hit 4,000 for the first time in over a decade, a 22 percent increase year-over-year.
Such a bullish market condition has led to visible business improvement in the third quarter of 2025 for some leading players, including LVMH Moët Hennessy Louis Vuitton, Hermès, and L’Oréal.
Dior is opening a flagship designed by French architect Christian de Portzamparc at Sanlitun, Beijing.
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According to LVMH’s chief financial officer Cécile Cabanis, while spending by Chinese tourists abroad was still down in the double digits, the performance in mainland China turned positive in the third quarter, with growth in the mid- to high-single digits. Both Louis Vuitton and Dior saw significant improvement with local customers in the period, the company added.
In a conference call with analysts, Eric du Halgouët, executive vice president of finance at Hermès, said he was “optimistic” as the country is beginning to recalibrate as its real estate sector stabilizes and financial markets in Hong Kong and mainland China are on the upswing again, with more clients scooping up big-ticket items such as pricier jewelry and watches.
The first week of October was the Chinese fall festival of Golden Week, in which the company “saw quite strong and dynamic” sales. He added that the brand has increased stock in anticipation of the end-of-year Western holiday season and the Chinese New Year at the beginning of 2026 for the fourth quarter of 2025.
L’Oréal chief executive officer Nicolas Hieronimus noted that the company is seeing a gradual recovery in mainland China, where the group outpaced the market. Year-to-date is estimated to have 1 percent growth, versus being flattish in the first half of 2025.
Erwan Rambourg, global head of luxury and consumer at HSBC, said in a recent note that there is a palpable rebound in energy in both Hong Kong and Shanghai, and the stalemate over the past 24 months in the luxury sector is over.
He observed that despite the market not seeing strong growth in China before 2027, the winners should grow in 2026, while others find their footing. Rambourg name-checked Coach, Ralph Lauren, Longchamp, Hermès, Loro Piana, Cartier, and Cuccinelli as outperformers, and bestowed the “winner” titles on Miu Miu and Louis Vuitton for owning the creative and cultural relevance games, respectively.
Louis Vuitton’s latest retail landmark, the boat-shaped “The Louis” in Shanghai.
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He pointed to the opening of “The Louis,” an unorthodox flagship in the shape of a boat that’s welcoming over 2,500 visitors a day in downtown Shanghai, as “a very democratic Instagrammable buzz as well as a refined intimate experience with competitors acknowledging ‘only Louis Vuitton can do this.’”
“In a market that needs some joy, an element of surprise, real reasons to reconnect with brands, given the morose backdrop, the initiative is clearly hitting a nerve even four months after the opening,” added Rambourg.
For Chinese shoppers, what they gravitate toward are the most visible brands that provide the utmost emotional value — in some instances, price may be only merely a number.
Chong Wen, a 33-year-old who works at a local bank in Guangzhou, recently purchased several items from Louis Vuitton, including a classic Neverfull for her mother-in-law and a monogrammed wallet for her husband. “It’s good-looking, it’s sturdy, and a vacation must-have,” she explained.
As for herself, Chong is mulling over the latest Love Unlimited bracelet from Cartier, which retails for around 75,000 renminbi, or $10,564. “Life is too hard, I just want to spend money to make myself happy,” said Chong.
