Analysis: Trade deal or truce? Questions as Trump meets with China’s Xi
WASHINGTON— President Trump faces the most important international meeting of his second term so far on Thursday: Face-to-face talks with Xi JinpingWho has made China a formidable economic and military rival to the United States.
The two presidents faced a broad agenda during their meeting in Seoul, starting with the two countries’ escalating trade war over tariffs and high-tech exports. The list also includes U.S. demands that China crack down on fentanyl, China’s aid to Russia in its war with Ukraine, the future of Taiwan and China’s growing nuclear arsenal.
Trump has already characteristically promised that the meeting will be a huge success.
“It’s going to be amazing for both countries, it’s going to be amazing for the whole world,” he said last week.
However, it is not yet clear whether the concrete results of the summit will meet this high standard.
Treasury Secretary Scott Bessent said Sunday that the two sides They agreed on a “framework” A situation where China will delay implementing strict controls rare earth elementsMinerals that are vital in the production of high-tech products, from smartphones to electric vehicles, from military aircraft to missiles. China also agreed to continue purchasing soybeans from U.S. farmers and reduce fentanyl compounds, he said.
Bessent said that in return, the United States would step back from the harsh customs duties it imposed on Chinese goods.
Nicholas Burns, the US ambassador to Beijing under then-President Biden, said such an agreement would amount to “an uneasy trade truce rather than a comprehensive trade agreement.”
“This may be the best thing we can expect,” he said in an interview Monday. Still, he added: “Stabilizing world markets and allowing US-China trade to continue for now would be a positive step.”
But U.S. and Chinese officials remain tight-lipped about what they agreed to on Xi’s other big trade demand: easier restrictions on U.S. high-tech exports to China, particularly advanced semiconductor chips used for artificial intelligence.
Burns said the two superpowers’ technology competition is “the most sensitive one in terms of where this relationship will go, which country will emerge stronger.”
Giving China easy access to advanced semiconductors “will only help” [the Chinese army] “In the competition with the US military for power in the Indo-Pacific,” he warned.
More specifically, other former officials and China hawks outside the administration have said they worry Trump may be too willing to trade long-term technology assets for short-term trade deals.
In August, Trump eased export controls to allow Nvidia, the world leader in AI chips, to sell more semiconductors to China. US company will pay 15 percent of its income from sales to the US Treasury.
Trump’s top first-term China adviser, Matthew Pottinger, protested in a recent podcast interview that the deal risked trading a strategic technology advantage “for $20 billion and Nvidia’s profitability.”
Some China observers warn that at the heart of the debate over technology is a fundamental incompatibility between the two presidents: Trump is focused almost entirely on trade and business deals, while Xi is focused on replacing the United States as the largest economic and military power in Asia.
“I don’t think the administration has a strategy for China,” said Bonnie Glaser, a China expert at the German Marshall Fund of the United States. “There is a trade strategy, not a China strategy.”
“The administration doesn’t appear to be focused on competing with China,” said Jonathan Czin, a former CIA analyst who now works at the Brookings Institution in Washington. “It focuses on making deals. … Tactics without strategy.”
“We have fallen into a kind of trade and technology myopia,” he added. “We are not talking about issues such as the pressure exerted by China” [of smaller countries] In the South China Sea. … China doesn’t want to have this bigger, more comprehensive conversation.”
It’s unclear whether Trump and Xi will have the time or intention to talk in detail about anything other than trade.
Even on the economic issues at the forefront, this week’s ceasefire is unlikely to create lasting peace.
“As with all such deals, the devil will be in the details,” said former ambassador Burns. “The two countries will continue to be trade rivals. We expect frictions and trade duels to continue until 2026.”
“Fasten your seat belts,” Czin said. “There are likely to be more sudden moves from Beijing ahead.”
In the long term, Trump’s legacy in US-China relations will be based not only on trade deals but also on greater competition for economic and military power in the Pacific Rim. No matter how this week’s meetings go, these challenges still lie ahead.
