Analysis: Trade deal or ceasefire? Questions as Trump meets China’s Xi

Washington – President Trump on Thursday faces the most important international meeting of his second term so far: a face-to-face meeting with Xi Jinping, who has made China a formidable economic and military challenge to the United States.

The two presidents face a wide-ranging agenda during their meeting in Seoul, starting with the two countries’ escalating trade war over tariffs and high-tech exports. The list includes US calls for a Chinese crackdown on fentanyl, China’s aid to Russia in its war with Ukraine, the future of Taiwan and China’s growing nuclear arsenal.

Trump had already promised, in particular, that the meeting would be a huge success.

“It will be wonderful for both countries, and it will be wonderful for the whole world,” he said last week.

But it is not yet clear whether the concrete results of the summit will measure up to this high standard.

Treasury Secretary Scott Besant said on Sunday that the two sides had agreed to a “framework” that would see China suspend stricter controls on rare earth elements, minerals critical to the production of high-tech products ranging from smartphones and electric cars to military aircraft and missiles. He said China has also agreed to resume buying soybeans from U.S. farmers and ban the ingredient fentanyl.

In return, Besant said, the United States would roll back its tough tariffs on Chinese goods.

Nicholas Burns, the US ambassador to Beijing under then-President Biden, said such a deal would be “an uneasy trade truce rather than a comprehensive trade deal.”

“This is probably the best we can hope for,” he said in an interview Monday. Still, he added, “this would be a positive step to stabilize global markets and allow US-China trade to continue for the time being.”

But U.S. and Chinese officials are tight-lipped about what has been agreed on Xi’s other big trade demand: easier U.S. restrictions on high-tech exports to China, especially advanced semiconductor chips used for artificial intelligence.

Burns said the technology competition between the two superpowers is “the most sensitive … in terms of where this relationship will go, which country will become more powerful.”

Giving China easier access to advanced semiconductors “only helps [the Chinese army] In a race with the US military for power in the Indo-Pacific,” he warned.

Other former officials and China hawks outside the administration have said, even more bluntly, that they worry that Trump may be willing to trade long-term technology assets for short-term business deals.

In August, Trump eased export controls to allow Nvidia to sell more semiconductors to China, the world leader in AI chips – in an unusual deal that would see the US company pay 15% of its revenue from sales to the US Treasury.

Matthew Pottinger, Trump’s top China adviser in his first term, protested in a recent podcast interview that the deal risks strategic technology interests “for $20 billion and Nvidia’s bottom line.”

Beneath the dispute over technology, some China observers warn, is a fundamental difference between the two presidents: Trump is focused almost entirely on trade and trade deals, while Xi is focused on displacing the United States as the major economic and military power in Asia.

“I don’t think the administration has a China strategy,” said Bonnie Glaser, a China expert at the U.S.-based German Marshall Fund. “It has a business strategy, not a China strategy.”

“It doesn’t seem like the administration is focused on competing with China,” said Jonathan Zinn, a former CIA analyst now at the Brookings Institution in Washington. “It’s focused on deal-making. … It’s tactics without strategy.”

“We’re caught in a kind of myopia of business and technology,” he added. “We are not talking about issues like Chinese repression [of smaller countries] In the South China Sea. China doesn’t want to have these big, broad negotiations.

It’s unclear whether Trump and Xi will have the time or interest to talk in detail about anything other than trade.

And even with growing economic issues, this week’s ceasefire is unlikely to bring lasting peace.

“As with all these agreements, the devil will be in the details,” said Burns, the former ambassador. “The two countries will remain fierce trade rivals. It is expected that in 2026, the conflict and other trade competitions will already be well under way.”

“Get up,” said Xin. “There may be more sudden moves from Beijing ahead.”

In the long run, Trump’s legacy in US-China relations will depend not only on trade deals, but also on the broader competition for economic and military power in the Pacific. No matter how this week’s meetings go, those challenges still lie ahead.