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Chinese President Xi Jinping is now back in Beijing, following his three-day state visit to the U.S. During his time in Washington, Xi got a state dinner and a tour of the National Archives, where his host, U.S. President Donald Trump, showed him the U.S. Constitution and the first treaty between the U.S. and Qing-dynasty China.<\/p>\n
The record of actual achievements from the summit was small. Both sides said that Xi and Trump agreed to build a \u201cconstructive relationship of strategic stability on the basis of respect, fairness, and reciprocity,\u201d and there were some small agreements involving trade and AI.\u00a0<\/p>\n
Markets had diverging reactions to the summit on Monday. Hong Kong\u2019s Hang Seng Index rose 0.7%, while mainland China\u2019s CSI 300 dropped 2.2%.\u00a0<\/p>\n
Yet given how far apart the U.S. and China are on a range of important issues\u2014trade, export controls, the status of Taiwan, and today\u2019s conflicts in Ukraine and Iran\u2014it\u2019s not surprising that few outside observers expected much to emerge from Xi\u2019s trip to Washington.<\/p>\n
\u201cExpectations were low for this meeting and those expectations were met,\u201d says Lindsay Newman, a visiting research fellow at King\u2019s College London.\u00a0<\/p>\n
Eswar Prasad, a professor of trade policy at Cornell University, agrees that the Trump-Xi summit \u201cfizzled out on substance, confirming the vast gulf between the two countries\u2019 objectives and the lack of enthusiasm on either side to craft a grand bargain.\u201d<\/p>\n
But a summit short on substance may be precisely what\u2019s needed. With neither side willing to make major concessions, Washington and Beijing appear to have settled for a more managed relationship, even as both countries rapidly try to decouple from the other.<\/p>\n
\u201cThe bilateral relationship is on tactical autopilot and will likely remain so as long as Trump and Xi maintain a cordial working rapport,\u201d says Ali Wyne, a senior research advisor on U.S.-China issues for the International Crisis Group.<\/p>\n
The key agreement from the flurry of meetings between U.S. and Chinese officials was an extension of the tariff truce, first agreed to last year in South Korea, for another two months. Both sides agreed to pursue lower tariffs on $30 billion worth of \u201cnonsensitive goods\u201d from each country. They also agreed to set up new crisis communication channels between their militaries.\u00a0<\/p>\n
In addition, the U.S. announced that China agreed to import 10 million tons of coal annually over the next two years, though the Chinese readout didn\u2019t mention this deal.\u00a0<\/p>\n
\u201cAlthough China wanted a longer-term extension, for Trump the brief pause gives him some breathing room through November\u2019s midterm elections,\u201d Newman says.\u00a0<\/p>\n
On Monday, both sides unveiled a list of goods that may see tariff reductions. The U.S. plans to cut tariffs on 77 different goods like fireworks, household equipment, and toys. China, in turn, plans to reduce tariffs on 1,619 product categories, including agricultural products, timber, seafood, dairy products, and medical equipment. <\/p>\n
Both sides also agreed to set up a dialogue mechanism over artificial intelligence, including a bilateral channel to discuss AI incidents. (Despite Trump\u2019s claim that Xi agreed to use the U.S. president\u2019s preferred term \u201csuperintelligence,\u201d Chinese officials said Saturday that the country \u201crespects the U.S. side\u2019s wording.\u201d)<\/p>\n
Hopes for more significant changes\u2014a further relaxation of export controls on U.S. semiconductors and Chinese rare earths; Chinese investment into the U.S.; or movement on the U.S. position on Taiwan\u2014weren\u2019t borne out.\u00a0<\/p>\n
\u201cAlmost everything else remains unresolved between the sides,\u201d Newman says.\u00a0<\/p>\n
Perhaps the most significant agreement was the announcement that Trump will return to China in November to attend the Asia-Pacific Economic Cooperation summit in Shenzhen. That visit will be followed by a second Xi trip to the U.S. in December, this time to attend the G20 meeting in Miami.\u00a0<\/p>\n
\u201cU.S.-China relations will have better stability, although without strategic concessions from either side,\u201d says Dan Wang, China director for the Eurasia Group. \u201cThe two leaders have set a positive tone \u2026 Details will be left to other top officials, likely around the time of APEC.\u201d<\/p>\n
Wang expects the trade truce to get extended again next year, noting China has a strong preference for external stability before the Communist Party\u2019s 21st Congress next autumn.\u00a0<\/p>\n
She\u2019s less optimistic about the prospects for cooperation on AI. The U.S. continues to impose tough controls on the sale of powerful AI processors to China; Chinese officials are also wary of recent calls to slow down AI development. \u201cBeijing still sees the U.S. approach as trying to constrain China\u2019s development,\u201d Wang explains.\u00a0<\/p>\n
In the months leading up to Xi\u2019s visit to the U.S., Washington imposed several new barriers targeting China. In August, the FCC banned new foreign-made humanoid robots and power inverters from being sold in the U.S. Officials have also placed several top Chinese universities on a research blacklist and imposed sanctions on several Chinese shipping companies and refiners as part of a broader pressure campaign on Iran.\u00a0<\/p>\n
\u201cThe most important aspect of the summit is that it took place at all,\u201d Macquarie China economist Larry Hu wrote in a research note late Sunday night. \u201cIt is meant to be more about optics than concrete deliverables. In that sense, the summit achieved its objective.\u201d<\/p>\n
Trump has intervened to stop more aggressive policies to preserve the relationship. He\u2019s held back on approving a $14 billion arms package to Taiwan. Officially, the Trump administration claims the pause is to ensure there are enough munitions for the U.S.\u2019s war in Iran, yet Trump has also talked about the arms package being a useful \u201cnegotiating chip\u201d for his China negotiations.\u00a0<\/p>\n
Trump has also expressed openness to Chinese car companies manufacturing in the U.S., a prospect which has alarmed others in Washington. (Congress is currently considering a ban on all Chinese cars in the U.S.; the bill has near-unanimous support among U.S. senators.)<\/p>\n
David Perdue, the U.S. ambassador to China, revealed Sunday that Trump offered to sell U.S. arms to China during Xi\u2019s visit, though the White House later said there was \u201cno plan or offer to sell arms to China.\u201d<\/p>\n
\u201cThe president is likely to continue constraining advisors who favor a more confrontational approach,\u201d Wyne suggests.\u00a0<\/p>\n
Still, China may be wary of how volatile the U.S. president\u2019s tone can be. \u201cGiven the nature of the U.S. administration, everything could change next month,\u201d says Chandran Nair, coauthor of Understanding China <\/em>and CEO of the Global Institute for Tomorrow, a Hong Kong\u2013based think tank. \u201cChina\u2019s main objective is to \u2018give face\u2019 and do what is possible without compromising itself, and thus maintain a certain steady state globally so things don\u2019t get worse.\u201d<\/p>\n Stabilization may be the best anyone can hope for, given the continued decoupling between the U.S. and Chinese systems. \u201cThe summit does not alter our baseline view that the U.S. and China remain in a phase of d\u00e9tente,\u201d Hu wrote in his research note.<\/p>\n China is building trade links throughout Europe, Southeast Asia, and Latin America to replace the U.S.; Washington, in turn, is trying to secure rare earth minerals and semiconductor production with allies like the Philippines, Japan, and South Korea.<\/p>\n When it comes to AI, China is building an entirely separate sector built on locally made chips and open-source models. U.S. developers like OpenAI and Anthropic are, in turn, trying to block Chinese access to their own powerful models.<\/p>\n \u201cThe baseline for the bilateral relationship is a slow and progressive deterioration of the trade, financial, and technological linkages between the two countries,\u201d Prasad says.<\/p>\n What the Xi-Trump summit might imply is that both sides are now trying for a managed decline of the relationship, rather than a clean break. Last year\u2019s trade standoff made both the U.S. and China \u201cmore aware that aggressively attempting to unwind their relationship carries dangers of its own,\u201d Wyne suggests. \u201cThe two countries may try to harness mutual vulnerabilities in the service of mutual restraint.\u201d<\/p>\n But as the two systems pull apart, China is growing more confident in its model of development and diplomacy, while Washington\u2019s preferred tools of sanctions and pressure are losing their force.<\/p>\n \u201cThe U.S. has failed to force China into its agenda,\u201d Wang adds. \u201cThat\u2019s given rise to China\u2019s more determined stance.\u201d<\/p>\n<\/div>\n #XiTrump #summit #ends #deals #managed #decline #U.S.China #relations #point<\/p>\n","protected":false},"excerpt":{"rendered":" Chinese President Xi Jinping i… <\/p>\n","protected":false},"author":1,"featured_media":5526,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[173,820,4594,273,8601,2380,8602,160,8603,5248,8566,8186,8600],"class_list":["post-5525","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-news","tag-china","tag-deals","tag-decline","tag-donald-trump","tag-ends","tag-geopolitics","tag-managed","tag-point","tag-relations","tag-summit","tag-u-s-china","tag-xi-jinping","tag-xitrump"],"yoast_head":"\n\u2018Slow and progressive deterioration\u2019<\/h2>\n