Biden and Xi are scheduled to speak on Saturday, in what a U.S. administration official said will likely be the last meeting between the sitting leaders of the world’s largest economies before Trump’s inauguration in January.

With the Republican president-elect having signaled a confrontational approach toward Beijing in his second term, the bilateral meeting will be a closely watched affair.

Xi and Biden arrived in Lima on Thursday with other world leaders for a two-day meeting of heads of state of the Asia-Pacific Economic Cooperation (APEC) group.

APEC, established in 1989 with the aim of liberalizing regional trade, brings together 21 economies that together account for about 60 percent of global GDP and more than 40 percent of global trade.

The summit agenda was expected to focus on trade and investment for what its supporters called inclusive growth.

But uncertainty over Trump’s next actions is now clouding the agenda – as is the case for the ongoing COP29 climate negotiations in Azerbaijan and the G20 summit in Rio de Janeiro next week.

On Thursday, APEC ministers, including US Secretary of State Antony Blinken, held their own closed-door meeting in Lima to set the tone for the summit that follows.

Trump announced this week that he would replace Blinken with Sen. Marco Rubio, a China hawk.

“America First”

The summit will also bring together, among others, Japan, South Korea, Canada, Australia and Indonesia.

President Vladimir Putin of APEC member Russia will not attend.

Trump’s “America First” agenda relies on protectionist trade policies, increased domestic fossil fuel extraction and avoidance of foreign conflict.

That threatens the alliances Biden has built on issues ranging from wars in Ukraine and the Middle East to climate change and trade.

The Republican president-elect has threatened to impose tariffs of up to 60% on imports of Chinese goods to equalize what he sees as an imbalance in bilateral trade.

China is grappling with a prolonged real estate crisis and sluggish consumption that can only be worsened by a new trade war with Washington.

But economists say punitive levies would also hurt the U.S. economy and other countries farther afield.

“Criminals and drugs”

China is an ally of Western pariahs Russia and North Korea, and it is strengthening its own military capacity while increasing pressure on Taiwan, which it claims as part of its territory.

It is also expanding its reach in Latin America through infrastructure and other projects under its Belt and Road Initiative.

Xi inaugurated South America’s first Chinese-funded port on Thursday, at Chancay, north of Lima, even as a senior U.S. official warned Latin American countries to be vigilant about Chinese investments.

Biden, meanwhile, will meet on Friday with Japanese Prime Minister Shigeru Ishiba and South Korean President Yoon Suk Yeol, key US allies in Asia.

Traveling with Biden, national security adviser Jake Sullivan said partner countries would announce the creation of a secretariat to ensure their alliance “will be an enduring part of American policy.”

China is not the only country in Trump’s economic crosshairs.

The new US leader has threatened to impose tariffs of 25 percent or more on goods from Mexico – another APEC member – unless he stops an “attack by criminals and drugs” crossing the border.

Peru deployed more than 13,000 members of the armed forces to keep the peace in Lima as transport workers and traders launched three days of protests against crime and government neglect.