Xi meets Trump: towards managed competition

Trade, rare earths, artificial intelligence, Taiwan and Iran. The 24 September summit at the White House is unlikely to produce a grand bargain between the United States and China. Instead, major international media outlets broadly point towards a new phase of managed competition: a strategic rivalry that is expected to last, but accompanied by mechanisms designed to contain its risks. To understand the real significance of the meeting, it will therefore be more important to look at figures, deadlines and implementation mechanisms than at the final statements.

Xi Jinping arrives in Washington at a delicate moment in relations between the world’s two largest powers. After months of trade tensions, technology restrictions and competition over supply chains, the United States and China appear to be seeking not genuine rapprochement, but a more structured way of managing their rivalry. Reuters puts the possibility of historic breakthroughs firmly in the background, describing a trade truce rather than major breakthroughs as the main focus of the summit. According to the agency, the central objective will be to determine whether Trump and Xi can extend the trade truce reached last year, at a time when Beijing appears to have little incentive to make major concessions. Bloomberg describes a summit in which the two leaders will mainly seek to keep an awkward relationship as stable as possible, despite greater tensions than at their previous meeting in May. Stabilisation, therefore, rather than reconciliation. Xi is also arriving at the negotiating table with Chinese exports still performing strongly and with a trade surplus that, according to Reuters, could exceed $1 trillion for the second consecutive year.

Tariffs and trade: extending the truce

The first issue will inevitably be trade. After the truce reached last year, Washington and Beijing must decide whether and how to extend it. The issue is no longer limited to tariffs. The two sides are also considering whether to establish more stable mechanisms that would allow ordinary trade to be separated from sectors considered strategically sensitive. The South China Morning Post, citing sources close to the negotiations, considers an extension of the truce almost certain. The Hong Kong newspaper has also reported that a delegation of Chinese business leaders could accompany Xi to the United States, signalling Beijing’s interest in using the summit as part of a broader normalisation of economic relations. Reuters has meanwhile reported that preparatory talks have included the possibility of facilitating trade in products considered non sensitive, while leaving sectors directly linked to national security outside the scope of the détente.

What to watch: the duration of any extension, the existence of precise deadlines and, above all, a timetable for subsequent negotiations. A general commitment to continue dialogue would have a very different meaning from a structured negotiating mechanism.

Rare earths: Beijing’s main negotiating lever

Rare earths are among the most sensitive issues and have become one of the clearest symbols of Western vulnerability in strategic supply chains. The Financial Times reported ahead of the meeting that Chinese shipments of rare earth magnets to the United States fell to 512 tonnes in August, down 20 per cent from July. The newspaper also highlighted Washington’s accusation that Beijing has not fully guaranteed the continuity of supplies agreed under the previous trade truce.

The issue is particularly sensitive because these materials are essential for the automotive industry, advanced electronics, defence and energy technologies. Bloomberg has described rare earths as China’s Trump card in the trade war, highlighting how difficult it would be for the United States and its allies to reduce their dependence on Chinese extraction and, above all, refining capacity in the short term. The issue is therefore not simply about trade volumes, but about control over one of the main choke points in the global technology economy.

What to watch: commitments on export licences, the time needed to approve them and the continuity of supplies. In this case, the real test will come after Washington. Actual flows in the following weeks will show whether the political agreement has worked.

AI and semiconductors: high tech diplomacy

The real novelty of the summit could come from artificial intelligence. AI, advanced semiconductors and computing capacity are now at the centre of the strategic competition between the United States and China. Washington continues to use export controls and technology restrictions to protect technologies considered sensitive, while Beijing sees many of these measures as an attempt to slow down its own development.

The Financial Times has summarised the problem by focusing on why the US and China are at odds over AI threats. The two powers recognise that the most advanced systems create risks, but they give different priority to AI security and remain deeply divided over the relationship between technological security and national security.

The South China Morning Post also reports that AI has dominated the final preparations for Xi’s visit. The two sides have discussed whether to integrate a new dialogue on artificial intelligence into high level economic talks, after months in which the separate channel produced limited progress. The Wall Street Journal also identifies technology and AI as major areas of friction, noting that technology and AI related restrictions will remain crucial areas of confrontation.

What to watch on the high tech agenda: the formalisation of the dialogue, a date for the next meeting and, above all, the creation of procedures for communicating about AI related incidents and risks. This would be one of the clearest signs that the two countries are moving from simple competition towards institutionalised management of that competition.

Taiwan: where détente ends

If trade and AI offer at least some room for negotiation, Taiwan remains the clearest limit to any rapprochement. Reuters has published an analysis of concerns among US allies in Asia, highlighting fears that Trump could soften the US position on the island in exchange for economic concessions from Beijing. Trump himself has described the package of weapons destined for Taipei as a very good negotiating chip.

For Beijing, Taiwan remains, in the language used by the Chinese leadership, the core of core interests in relations with Washington. Even an apparently minor change in US language would therefore be closely watched in Beijing, Taipei and Tokyo.

Reuters notes a climate of considerable concern among US allies about the possible evolution of American policy towards Taiwan. It will therefore be important to look not only at whether Taiwan appears in the final communiqué, but at the precise language used. Any changes compared with traditional US wording could be politically more significant than other agreements announced during the summit.

Military to military: building guardrails

The military dimension is the least visible issue, but one of the most important in the logic of managed competition. As the military presence of both powers in the Indo Pacific grows, so does the risk that an incident involving ships or aircraft could trigger political escalation.

In this context, the most significant result would not necessarily be a reduction in military competition, but the creation of guardrails capable of preventing it from accidentally escalating. After the summit, it will therefore be important to look closely at operational hotlines, regular meetings between military leaders, crisis communication procedures and any steps towards new talks on arms control.

Agriculture, Boeing and energy: the transactional side

Alongside the major strategic issues, there is also a more immediately transactional side to the negotiations. Reuters identifies possible Chinese concessions including new purchases of Boeing aircraft and American agricultural products, as well as progress on fentanyl.

This is another area in which the increasingly pragmatic nature of the relationship becomes clear. China US ties have become more transactional, according to Wu Xinbo of Fudan University in an analysis cited by the agency.

Purchasing American products would allow Trump to present easily measurable results domestically. For Beijing, it represents a relatively flexible negotiating tool that can be used in exchange for commercial or political concessions.

What to watch: the quantity, value and duration of commitments. A general memorandum would carry very different weight from contracts or multi year numerical targets.

Fentanyl: the enforcement test

The fight against fentanyl remains another US priority. Washington is asking Beijing to impose stronger controls on the chemical precursors used to produce the opioid, and Reuters includes the issue among the areas where Xi could offer concessions to the United States.

Here too, the key distinction will be between political commitments and enforcement. The questions will be whether new substances are placed under tighter controls, whether action is taken against companies involved in producing or exporting precursors, and above all whether new forms of cooperation between the authorities are established.

Iran: the geopolitical variable

Finally, the summit will have a dimension that goes beyond the bilateral relationship: Iran. Washington considers Xi one of the few leaders with enough economic influence over Tehran to potentially contribute to increasing pressure on the Iranian government.

Expectations are nevertheless low. Reuters notes that Xi has so far shown little inclination to apply the pressure requested by Washington, while China maintains significant economic relations with Tehran. Bloomberg also includes the consequences of the war with Iran among the issues expected to influence the preparatory talks, alongside trade and artificial intelligence.

It will be important to watch for specific references to energy exports, sanctions or diplomatic initiatives. General language would signal that the distance between the two sides remains significant.

No new order, but rules for competition

Overall, the expectations emerging from the main international media outlets are relatively modest. Reuters describes a truce rather than a breakthrough. Bloomberg sees the main objective as keeping a difficult relationship stable. The South China Morning Post considers an extension of the trade truce highly likely, while the Financial Times and Wall Street Journal are focusing mainly on the structural issues that will remain unresolved: rare earths, AI and technology.

The summit should therefore be read on three levels. The first concerns immediate deliverables: an extension of the trade truce, rare earths, purchases, fentanyl and possible tariff measures. The second concerns the institutionalisation of competition: dialogue on AI, regular economic meetings and military channels for managing crises. The third will only become visible in the following weeks: what happens in practice on Taiwan, semiconductors, export controls and critical minerals.

This is probably where the summit’s most important significance lies. The United States and China are not trying to eliminate their strategic rivalry. They are trying to establish how far that rivalry can go without becoming unmanageable. For this reason, once the meeting is over, numbers, dates, procedures and future negotiating appointments will matter more than photographs and statements of principle. These will be the elements that show whether Washington has produced a concrete stabilisation of US China relations or simply another truce before the next crisis.