Trump and Xi 2.0
Nine years after Trump’s trade war began, the stakes have never been higher. Everything to know before the most consequential U.S.-China summit in years.
Written with Bruce Dickson.
President Trump lands in Beijing today for two days of talks with Xi Jinping for a summit originally scheduled for March before the U.S. and Israeli strikes on Iran forced a postponement. Xi is hosting a wartime president whose military is stretched across two conflicts, whose allies are questioning American reliability, and whose attention is split in ways that give Beijing significant advantages going into the room.
It wasn’t always this complicated. Trump’s last visit to Beijing, in 2017, looked like a coronation: a state dinner at the Forbidden City, military bands, and the kind of imperial pageantry China reserves for leaders it wants to impress. Xi was betting that the spectacle would buy goodwill. Days later, Trump launched a trade war. From Beijing’s perspective, it was a humiliating betrayal.
The U.S.-China relationship that exists today barely resembles the one from that 2017 visit.
Back then, American foreign policy ran on a working assumption that turned out to be completely wrong: bring China into the global economy, and it would gradually liberalize. Trade would accomplish what diplomacy couldn’t. Beijing would eventually become what Deputy Secretary of State Robert Zoellick famously called a “responsible stakeholder“ — a rising power that plays by the rules because it benefits from them. That bet failed.
Today it’s a contest over who controls the foundational infrastructure of the next century: semiconductors, artificial intelligence (AI), rare earth minerals, naval routes, supply chains, and cyberspace.
It’s also worth remembering what didn’t exist in 2017: no Russia-Ukraine war, no Iran war, no AUKUS (the trilateral security pact between the U.S., U.K., and Australia, built specifically to counter Chinese influence in the Indo-Pacific), no serious debate about Taiwan timelines. The world the U.S. is navigating today would have been difficult to imagine when Trump last visited Beijing.
China is also a fundamentally different country than it was nine years ago.
It now has the world’s largest navy by ship count — over 370 ships according to the Pentagon’s own assessments, while the U.S. Navy is projected to shrink to 287. That gap is only going to widen: China has an estimated 230 times the shipbuilding capacity of the United States.
It has spent years building domestic semiconductor capacity after the U.S. moved to choke off its access to advanced chips — and while it still trails the cutting edge, it’s far less behind than Washington expected. It dominates the processing of rare earth minerals, which are essential to everything from EV motors to missile systems to radar, meaning that even when those minerals are mined elsewhere, they often still get refined in China. And it has spent years deepening trade relationships across Africa, Latin America, and Southeast Asia — reducing its dependence on Western markets while building the kind of global influence that doesn’t show up in a single trade deficit number.
None of this means China is winning outright. Youth unemployment is high, growth has slowed, and capital has been leaving. The U.S. still leads at the frontier of AI research, still has superior carriers and combat-experienced forces, and still commands an alliance network China can’t come close to matching. But the perception of leverage has shifted — and in geopolitics, perception has a way of becoming reality. In 2017, America looked dominant but frustrated. In 2026, China looks patient while America looks overstretched, tied down in two overseas conflicts with allies wondering whether Washington’s commitments still mean what they used to.
After a series of negotiations through 2025, both sides rolled back tariffs and reached agreements on rare earth access that China has since been slow to honor. The trade relationship is stabilizing on paper, but underneath, the leverage battle is still very much ongoing.
What to Watch For
Talks begin Thursday and run through Friday. China is expected to announce purchases of Boeing aircraft, U.S. agricultural goods, and energy — the transactional sweeteners designed to make the summit look like a win for Trump. Two new trade mechanisms may also be announced: a Board of Trade and a Board of Investment. Officials acknowledge these will require substantial subsequent work before they mean anything. Watch for them being spun as bigger than they are. China agreed to buy more U.S. agricultural products in both 2019 and 2025 and didn’t fully follow through either time.
Elon Musk and Tim Cook are among more than a dozen top executives invited to join the delegation. Both have enormous business exposure in China. Apple is arguably the most entangled American company in the relationship, with manufacturing, supply chains, market access, and labor all running through Beijing’s goodwill. Their presence signals this is as much a commerce trip as a diplomacy trip. It also gives Xi additional leverage, because both men have personal incentives to see the relationship stabilized on terms Beijing prefers.
The Tariff Wars
Trump’s original theory was to hit China with tariffs, and Beijing would have no choice but to make structural concessions. It didn’t work that way.
When Trump launched the trade war in 2018, China retaliated hard, targeting American agriculture, soybeans, and manufacturing in states that mattered politically. But the more consequential response was China’s adaptation. China rerouted manufacturing through Vietnam, Mexico, and ASEAN intermediaries, deepened trade relationships across the Global South, and accelerated domestic production. Products technically stopped being “Made in China” while still depending heavily on Chinese inputs. The tariffs didn’t hurt China as much as expected.
The agriculture numbers tell the story: Chinese purchases of U.S. soybeans dropped dramatically in 2025, pivoting instead to Brazil and Argentina. Although it resumed buying some American soybeans after the Trump-Xi meeting in South Korea in late 2025, it has yet to live up to its full commitment. All U.S. agricultural exports to China were down 53 percent in the first seven months of 2025 compared to the year before. It’s almost a carbon copy of what happened in Trump’s first term, when the value of U.S. soybean exports to China collapsed from $14 billion in 2016 to $3.1 billion in 2018. China ran the same playbook and it worked again.
Trump also overreached legally. In his second term, he imposed sweeping global tariffs using emergency powers under the International Emergency Economic Powers Act (IEEPA), which the Supreme Court ruled he didn’t have that authority to do.
As a result of the U.S.-China trade war, the U.S. trade deficit with China dropped from $375 billion in 2017 to $202 billion in 2025. But those numbers are deceiving because much of China’s exports to the US have been rerouted through other countries. The total trade deficit of the U.S. rose from $792 billion in 2017 to $1.2 trillion last year. The Chinese share of that overall deficit is less, but the deficit continues to grow.
