Xi and Trump Scheduled to Meet with Several High-Profile Issues on the Docket
U.S. President Donald Trump and President of the People’s Republic of China (PRC) Xi Jinping are scheduled to meet in Beijing on Thursday and Friday for what experts are calling a “high-stakes” summit.
The conflict in the Middle East is likely to hang over the Trump-Xi summit, with Trump arriving in Beijing with fewer cards to play in the negotiations.
Analysts expect the most tangible outcomes to include an extension to the current trade truce, which was agreed to in October, renewing Chinese purchases of American agricultural goods, such as soybeans, and Boeing aircraft.
Another key issue on the table for the upcoming summit in Beijing is U.S. policy towards Taiwan, in which Beijing may try to shift some of the language regarding the issue.
U.S. President Donald Trump and President of the People’s Republic of China (PRC) Xi Jinping are scheduled to meet in Beijing on Thursday and Friday for what experts are calling a “high-stakes” summit. Trump and Xi last met in South Korea in October amidst a trade war over U.S. tariffs on Chinese goods, which resulted in Beijing’s reciprocal tariffs and restriction of access to rare earth e elements and critical minerals. The South Korean summit resulted in a pause in the escalation, but the war in Iran has now significantly altered the global landscape. The meeting is unlikely to result in a bilateral reset, but it is more likely that both Washington and Beijing will focus on stabilizing the relationship, preventing additional economic disruption, and seeking gains that can be translated as positive wins to their respective domestic audiences.
The conflict in the Middle East is likely to hang over the Trump-Xi summit, with Trump arriving in Beijing with fewer cards to play in the negotiations. Reports suggest that, for Washington, the war in the Middle East has overshadowed the planning of the Beijing summit and reduced the focus to key economic priorities. On trade, the summit will realistically not produce a diplomatic breakthrough between the two countries, but rather modest and concentrated trade and technology deals that both sides can claim as easy wins without making any major strategic concessions. Analysts expect the most tangible outcomes to include an extension to the current trade truce, which was agreed to in October, renewing Chinese purchases of American agricultural goods, such as soybeans, and Boeing aircraft. Beijing is also likely to push for greater access to advanced semiconductors — critical components of advanced AI systems — while Washington will likely seek assurances of more access to the PRC’s rare earth and critical mineral supply.
For the PRC, another key issue on the table for the upcoming summit is U.S. policy toward Taiwan. Last year, the U.S. approved an $11 billion arms package to Taiwan — which received condemnation from the PRC and was followed by military exercises near Taiwan — while another $14 billion package is awaiting final approval. According to Chris Buckley at the New York Times, Beijing hopes to continue to delay this approval — possibly by leveraging easy trade wins at the summit — with a longer-term goal of reducing the size, scale, and quality of the package. In Cross-Strait relations, language on the U.S. position vis-à-vis Taiwan carries significant consequences, and Beijing may press Washington to shift its long-standing formulation from “not supporting” Taiwan’s independence to “opposing” independence. On Taiwan, official wording is its own arena in the U.S.-PRC strategic competition and carries implications for future policy and deterrence.
The Iran conflict has also become politically and economically costly for the Trump administration, leaving it with less leverage in trade negotiations with Beijing. Although the PRC has been relatively unaffected by global energy shortages compared to the rest of Asia due to large stockpiles and diversified energy, a weakening of international demand for Chinese exports, due to the very real possibility of a global recession, could severely impact the PRC’s economy long-term. Additionally, the PRC’s economy is already facing slower growth and a high youth unemployment rate, while price increases from the high oil prices have affected the cost of production for petrochemical products like plastics up to 20 percent, according to the BBC. However, Chinese import and export levels surged in April, as exports rose 14.1 percent compared to the previous year, reaching $359.4 billion, while imports jumped even higher, up 25.3 percent to $274.6 billion, and the PRC’s trade surplus reached $84.8 billion while its surplus with the U.S. grew by 13 percent, according to the New York Times. For imports, elevated energy costs stemming from the ongoing conflict involving Iran drove up prices. For exports, growth was fueled by strong global demand for Chinese-made chips, electronics, industrial equipment, and electric vehicles.
On one hand, the PRC’s resilience in the face of global energy shortages gives it some leverage in talks with the U.S., where the conflict in Iran is a top priority. On the other hand, Beijing also does not benefit from the prolonged crises in the Gulf, with interruptions in the global market as well as to the PRC’s oil imports from Iran. If anything, the war in the Middle East has likely served to reinforce the CCP’s domestic goal of energy diversification and to accelerate the country’s clean energy transition to reduce dependence on imported oil, minimize the risk of “maritime chokepoints,” and to safeguard the Chinese economy.
Beijing has already signaled its desire for a diplomatic solution to the Iran crisis. The PRC’s Foreign Minister Wang Yi hosted Iranian Foreign Minister Abbas Araghchi in May and called for a ceasefire, continued negotiations, and the restoration of safe passage through the Strait of Hormuz. At the same time, the PRC has defended Iranian sovereignty and security concerns and has resisted U.S.-backed efforts at the United Nations to pressure Iran over the Strait of Hormuz, believing that it legitimized the U.S.-military action that triggered the conflict, which it believed to be unlawful. Simultaneously, Beijing has practiced shuttle diplomacy with the Gulf countries, where the PRC has significant economic and trade interests.
Much analytical focus has been placed on why and how the CCP would aid the regime in Tehran, and whether Beijing will use its position to help end the conflict. While the CCP would like to see the Strait of Hormuz open for economic and energy security purposes, it’s unlikely that Xi is willing to spend political capital to help Trump clean up a mess he created. The conflict has illustrated that analyzing the Iran-China relationship (and also, by extension, the Iran-Russia-China axis) through the lens of a Western alliance system is not conducive to understanding the geopolitical realities. The relationship between Theran and Beijing is issue-specific, opportunistic, asymmetrical, and grounded in transactions rather than ideology or values. Even as China and its economy have been negatively affected by the war in Iran, that is short-term pain that Beijing is willing to tolerate for what looks like, on the whole, a defeat for the United States in its war against Iran. Once the conflict winds down, Tehran will still be in control of the Strait of Hormuz, effectively determining which countries are privy to safe passage, which are extorted, and which might be threatened. As a strategic partner of Iran, China will be a beneficiary. The inability of the United States to finish the job in Iran will call into question Washington’s staying power and could very well encourage fence-sitters and middle powers (including some U.S. allies in the Middle East and Asia) to reconsider their relationships with the United States in the longer-term. And as Robert Kagan recently noted in an essay for The Atlantic, another byproduct of the Iran war could be a naval race among great powers. Finally, the depletion of U.S. missile stocks leads to a whole host of vulnerabilities, both for Washington and for many of its allies, from Israel to Taiwan.