Politics 6 min read By Arthur Ellington
Xi-Trump Summit Yields Modest Deals and a Tariff Truce Extension
The Xi-Trump summit produced limited agreements, including a two-month tariff truce extension and new military communication channels, as both sides settle for a managed relationship.
Chinese President Xi Jinping returned to Beijing after a three-day state visit to Washington that produced few concrete outcomes but signalled a shared preference for managing tensions rather than resolving them. The summit between Xi and U.S. President Donald Trump ended with both sides agreeing to build what they described as a «constructive relationship of strategic stability on the basis of respect, fairness, and reciprocity», yet the record of actual achievements remained thin.
Markets offered a mixed verdict. Hong Kong's Hang Seng Index rose 0.7 per cent, while Mainland China's CSI 300 dropped 2.2 per cent. Analysts had expected little from the encounter given the depth of disagreement on trade, export controls, Taiwan, and conflicts in Ukraine and Iran. «Expectations were low for this meeting and those expectations were met», said Lindsay Newman, a visiting research fellow at King's College London.
The most tangible result was an extension of the tariff truce first agreed last year in South Korea, now prolonged by another two months. Both sides committed to pursuing lower tariffs on $30 billion worth of «non-sensitive goods» from each country and to establishing new crisis communication channels between their militaries. The U.S. also announced that China agreed to import 10 million tons of coal annually over the next two years, though the Chinese readout did not mention this deal.
On Monday, both governments unveiled lists of goods that may see tariff reductions. The U.S. plans to cut tariffs on 77 product categories including fireworks, household equipment, and toys. China intends to reduce tariffs on 1,619 categories, covering agricultural products, timber, seafood, dairy products, and medical equipment. A dialogue mechanism on artificial intelligence was also agreed, including a bilateral channel to discuss AI incidents. Despite Trump's claim that Xi agreed to use the term «super intelligence», Chinese officials said the country «respects the U.S. side's wording».
Hopes for more significant movement — a relaxation of export controls on U.S. semiconductors or Chinese rare earths, Chinese investment into the U.S., or a shift on Taiwan — were not realised. «Almost everything else remains unresolved between the sides», Newman said. Eswar Prasad, a professor of trade policy at Cornell University, said the summit «fizzled out on substance, confirming the vast gulf between the two countries' objectives and the lack of enthusiasm on either side to craft a grand bargain».
Yet a summit short on substance may be precisely what the relationship requires. 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. «The bilateral relationship is on tactical autopilot and will likely remain so as long as Trump and Xi maintain a cordial working rapport», said Ali Wyne, a senior research adviser on U.S.-China issues for the International Crisis Group.
Perhaps the most significant agreement was that Trump will return to China in November for the Asia-Pacific Economic Cooperation summit in Shenzhen, followed by a second Xi trip to the U.S. in December for the G20 meeting in Miami. «U.S.-China relations will have better stability, although without strategic concessions from either side», said Dan Wang, China director for the Eurasia Group. «The two leaders have set a positive tone … details will be left to other top officials, likely around the time of APEC.»
Wang expects the trade truce to be extended again next year, noting China has a strong preference for external stability before the Communist Party's 21st Congress next autumn. She is less optimistic about AI cooperation. The U.S. continues to impose tough controls on the sale of powerful AI processors to China, and Chinese officials are wary of recent calls to slow down AI development. «Beijing still sees the U.S. approach as trying to constrain China's development», Wang explained.
In the months before Xi's visit, 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 also placed several top Chinese universities on a research blacklist and imposed sanctions on Chinese shipping companies and refiners as part of a broader pressure campaign on Iran. Trump has intervened to stop more aggressive policies to preserve the relationship, holding back on approving a $14 billion arms package to Taiwan. Officially, the administration claims the pause is to ensure enough munitions for the U.S. war in Iran, yet Trump has also described the arms package as a useful «negotiating» tool.
«The most important aspect of the summit is that it took place at all», Macquarie China economist Larry Hu wrote in a research note. «It is meant to be more about optics than concrete deliverables. In that sense, the summit achieved its objective.»
6
