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US president makes final stop on Asia trip

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Meetings with China's Xi, South Korea's Lee expected

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Trump expects to cut China tariff related to illicit

fentanyl

precursor trade

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North Korea test-fires missiles ahead of Trump visit

(Recasts after Trump lands in South Korea, adds comments and

details)

By Trevor Hunnicutt and Jihoon Lee

GYEONGJU, South Korea, Oct 29 (Reuters) - U.S. 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 U.S. 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

Gyeongyu, 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 U.S. tariffs on Chinese goods in

exchange for Beijing's commitment to curb exports of fentanyl

precursor chemicals, he added.

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 August 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 U.S.

immigration laws to allow for more workers to build factories

after a raid on a Hyundai Motor ( HYMLF ) 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 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.

TAIWAN ON THE AGENDA?

Filled with thousands of police and soldiers for security,

Gyeongju will host the APEC forum this week, but Trump will skip

the leaders' summit scheduled for Friday and Saturday.

"Trump dislikes large international gatherings and prefers

to have one-on-one meetings with key leaders," said Christopher

Padilla, senior adviser at advisory firm Brunswick Group in

Washington. "But while the U.S. steps back, most of the world

has continued to work through such institutions, finding them a

useful source of cooperation on international problems."

Instead, Trump will address the APEC CEO summit, hold

bilateral meetings with several countries' leaders, including

China's Xi, and have dinner with Lee.

The Xi-Trump meeting, expected on Thursday, is overshadowing

the rest of the week's busy diplomatic schedule.

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, U.S. officials said.

The news sent stocks soaring to record peaks.

Taiwan Foreign Minister Lin Chia-lung said on Tuesday that

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 U.S. arms sales to Taipei.

Trump told reporters on Wednesday that he did not know

whether he would even discuss Taiwan with Xi.

FINAL STOP IN ASIA TRIP

Trump is arriving in Gyeongju after a whirlwind swing

through the region, among the hardest hit by his tariff policies

and increased U.S.-China competition.

In Malaysia, he announced a slew of trade agreements on the

sidelines of the 11-member Association of Southeast Asian

Nations summit 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 U.S. and Japan also released a list of projects in which

Japanese companies are eyeing U.S. investments, related to

Tokyo's pledge earlier this year of $550 billion in strategic

U.S. 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.