Trump-Xi talks could hinge on two tech flashpoints between U.S. and China
US President Donald Trump’s upcoming summit with his Chinese counterpart Xi Jinping may hinge on two important technological flashpoints: critical minerals and market access for American companies.
The highly anticipated bilateral meeting between the two countries, which deadlocked over tariffs just a year ago, began on Thursday with warm words exchanged by the two leaders. The discussions will continue until Friday and are expected to cover major trade issues as well as geopolitics in Taiwan and Iran.
But issues related to the U.S. and Chinese technology sectors can be significant points of discussion and contention, including among key American executives. Nvidia’s Jensen Huang, Tesla’s Elon Musk and Apple’s Tim Cook joins Trump on the plane.
“It’s not just about one trip or one headline, it’s about the direction of AI supply chains, the shape of future export controls, and the extent to which U.S. chip leadership remains monetizable in China,” Dan Ives of Wedbush Securities said in a note Wednesday. he said.
“The presence of Huang, Musk, Cook and others signals that technology and trade are among the top U.S. priorities at the meetings,” he added.
market access
U.S. tech companies’ access to the world’s second-largest economy is a key focus for Trump; The US president said opening up China to US businesses would be his “first request” from Xi.
Beijing welcomed deeper US trade involvement. “China’s opening-up door will further expand,” Xi said on Thursday.
The cordial atmosphere marks a sharp shift in relations from a year ago, when China became the first major economy to retaliate against Trump’s “Liberation Day” tariffs in April 2025.
Rules governing the sale of Nvidia’s advanced AI chips to China are an important issue. Immediately after Trump met with Xi on Thursday, Reuters reported that Washington had approved the sale of Nvidia’s H200 AI chips to several major Chinese tech firms, citing three people familiar with the matter.
“We believe Nvidia is still pressuring the U.S. government to allow the company to sell to China,” Morningstar senior equity analyst Brian Colello told CNBC on Thursday. he said. “We suspect Nvidia wants to negotiate a solution where it can sell some equipment to China and thus become part of the Chinese AI stack.”
But Council on Foreign Relations senior fellow Heidi Crebo-Rediker told CNBC that a licensing deal for Nvidia’s H200 chips could be “politically explosive” and trigger a “violent response from China hawks” in Congress.
“One possible outcome is not a clean reopening of the Chinese market, but a conditional, closely managed channel for Nvidia sales, perhaps with safeguards, fees or limits,” he added.
Other technology executives are also likely eyeing market opportunities.
“The U.S. tech executives joining Trump make up a stellar roster, and their common goal appears to be to create a so-called Board of Trade and Board of Investment with China,” Lauryn Williams, deputy director of the Center for Strategic and International Studies think tank, told CNBC, referring to a proposed body to govern trade relations between the countries. he said.
Tesla will likely seek full autonomous driving approval in China, Brookings Institution foreign policy expert Kyle Chan told CNBC. “Apple and Meta “For consumer products, they may want to make deals with supply chain partners in China.”
Tesla, Apple and Meta have been approached for comment.
Crebo-Rediker said Apple and Tesla would benefit less from a “headline-grabbing invention rather than a calmer operating environment” because their presence in China is through factories, consumers, regulators and competitors.
critical minerals
Another area of potential contention is China’s overwhelming control of critical and rare earth mineral markets. According to the International Energy Agency, Beijing was responsible for 59% of the world’s rare earth mining and 91% of its refining in 2024.
“China’s export controls on rare earths and magnets are a powerful source of leverage for Beijing,” Chan said.
“Trump may ask Xi to grant general licenses to American commercial users to secure rare earth materials,” he added. “Even if there is an agreement on licenses, China’s control over rare earths will likely remain a potential source of advantage.”
China’s control over critical and rare earth minerals was a key factor in the country’s retaliation against US tariffs in 2025; Before Beijing restricts some exports to the US The trade ceasefire came into force.
Paul Triolo, partner at US consultancy Albright Stonebridge Group, said that while the critical rare earth mineral issue remains “acute”, a deal could be struck for the US to relax certain export chip controls in exchange for progress in this area. But he added that the “political atmosphere” in the US would make this difficult.
Crebo-Rediker said the “best-case outcome” would be an extension of the 2025 trade truce, in which tariffs between the countries are reduced. But even under this ceasefire, China’s export controls on certain heavy rare earth elements and magnets have not been fully reversed, he added.
“This is making the US administration step back,” Crebo-Rediker told CNBC. “The United States and its allies cannot outpace, outpace, or outspend China quickly enough to rebuild resilience in the near term.”
