Tech, Trade and Tariffs: Inside the High-Stakes Xi-Trump Meeting

The leaders of two of the world’s superpower nations are set to meet as US President Donald Trump heads to Beijing for a summit with his Chinese counterpart, Xi Jinping. Trump will be the first American President in over a decade to visit China on Wednesday.

The much-awaited summit between the two leaders was originally scheduled for March; however, it was postponed due to the ongoing Iran war.

The war, which began on February 28, will be a critical point in the summit, which the world is keenly looking forward to. Beijing has significant economic ties and camaraderie with Tehran, and Washington is likely to influence Beijing to help convince Tehran to strike a deal.

But one may wonder why China is being pressed on Iran. It’s because China is the largest oil buyer from Iran, and over 50% of the transit passes through the now-choked Strait of Hormuz.

It is as much China’s need to reopen the strait as it is for the US and the rest of the world.

Earlier, the US had already sanctioned several Chinese firms for purchasing fuel from Iran, according to a Bloomberg report. Trump also alleged that Beijing was providing Tehran with weapons to support the war, which Chinese officials deemed a ‘false association.’

Trump 2.0 Meets Xi

Trump’s first term in office was marked by fractious relations with China, with the world almost getting ready for a new Cold War. Trump’s second term, meanwhile, has been see-sawing through tariff impositions and striking massive trade deals, which clearly leveraged Washington.

However, trade with China doesn’t seem to have yielded as much as Trump expected. China did not bend; in fact, it backfired on Washington after China choked the world with its restrictions on rare-earth minerals, over which it has a near-global monopoly.

Following back-and-forth tariffs, supertariffs, negotiations, restrictions, and truces, both sides are now expected to extend the truce and sign more deals. Taiwan remains a top priority for Xi.

He has warned Trump to be cautious on arms sales to the island after Washington unveiled a record $11 billion weapons package. Trump has signalled that he will take up discussions on US arms sales to Taiwan with Xi.

Six months ago, when Trump and Xi met in South Korea, the top concern was tariffs.

But now, with the rapidly evolving geopolitical landscape and critical blows to Trump’s trade and tariff policies, the meeting between the two supremos has much more to observe.

What’s On the Table?

Tariffs. Trump’s tariff policies have been tragic in a strategic sense, as US courts continue to strike down his policies. In February, the US Supreme Court struck down the Liberation Day tariffs, or the reciprocal tariffs.

The ruling was considered one of the biggest blows to Trump’s economic decisions, and it marked a tax return of $177 billion, the largest in US history.

Last week, a US federal court turned down his blanket 10% tariff, imposed under Section 177 of the US Trade Act of 1974. The US administration is now exploring other ways, including a probe launched under Section 301. The investigation was launched against 16 trading partners, including China.

Xi and Trump are expected to seek an extension of the truce they reached in October following the trade war. The truce diluted tariffs and lifted some export controls by China, including those on rare-earth shipments.

The trade of illicit fentanyl has remained a point of contention. Trump imposed a 10% tariff on imports from China to pressure Beijing to crack down on the production of fentanyl, a synthetic drug that has led to an addiction and overdose crisis in the US.

Washington later raised the tariffs to 20% before the court ruled against the tariff policy.

However, just two days ahead of Trump’s arrival, Beijing announced that it had dismantled a cross-border drug trafficking network in a joint operation with the US, hinting at increased cooperation and progress on the drug issue.

Long-Term Commitments

Several other Asian economies, including Japan, South Korea, and India, have made large commitments to invest in the US or purchase more American goods.

As per reports, the Trump administration is pushing the same agenda with Beijing as well. According to the Bloomberg report, the summit is expected to offer business deals and purchase commitments from China, including a potential historic order of jets from Boeing Co.

White House spokesperson Anna Kelly reportedly said that agreements on agriculture, aerospace, and energy were also up for discussion.

Race for AI Supremacy

Apart from traditional trade and purchase agreements, both countries are also sprinting in the Artificial Intelligence race.

US officials are expected to raise concerns over deep tech and the scope of AI, and will explore ways to open a new channel of communication with Beijing to discuss issues around AI and other technology regularly.

A major point of friction is that Chinese developers are using cutting-edge US AI platforms to produce competitive products at a cheaper cost, potentially sabotaging American AI platforms.

Complaints have been raised by major American corporations, including OpenAI Inc, Anthropic PBC, and Google’s Alphabet Inc.

Meanwhile, China has complained that US export controls have limited the ability of Chinese companies to access the most cutting-edge chips from tech giants, including Nvidia.

Last December, Trump allowed Nvidia to export a less capable AI accelerator chip to Chinese customers.

The Xi-Trump meeting is a much-awaited one. With decade-long friction over tariffs, trade, and technology, the summit is expected to yield significant progress in the bittersweet relationship between the two major economies.