It can mean “compromise.” Example: You offer $500 to buy something, but the seller wants $1000. You say “let’s meet halfway and agree on $750.” It can also literally mean to meet half way between two points. Example: Two persons who work 1 mile from each other agree to meet for lunch at a restaurant that is 1/2 mile from each of them.

I think most anglophones would recognize this as a shortened version of "Let's meet halfway between us." It's used a lot.