Beijing, May 14, 2026. Great power diplomacy has its own choreography and Thursday's opening in the Great Hall of the People was textbook perfect. Donald Trump came in trailing superlatives: “a great leader,” “an honor to be your friend,” “better than ever before.” Xi Jinping came in with a warning.

That contrast alone speaks for itself in terms of where this summit stands, who has the psychological advantage, and why the results of these two days in Beijing could determine the next decade of the world economy more than is implied in the photo-ops that are supposed to be of interest.

In the center of the talks, Xi made Taiwan the biggest of all issues in US-China relations, telling Trump that if he handles Taiwan matters properly, then “the bilateral relationship will enjoy overall stability”, but if he does not, then “the two countries will have clashes and even conflicts, putting the entire relationship in great jeopardy”. That's not a partner's language of dialogue. It's a red line, uttered in diplomatic verbiage, and it's the first hour of a summit billed by Washington basically as a trade mission.

Trump's language was very different from Xi's, as he started his meeting with flattering words and promises, pledging that the relationship would be "going to be better than ever before," whereas Xi's opening comments were darker, firmly reminding Trump of how far they remained on issues such as Taiwan, the war in Iran and trade disputes.

The difference between the body language of the two men wasn't coincidental. It was a sign of a structural change that has been quietly noted by analysts in Washington for more than a year.

Xi's Leverage - Built Over Years of Patience

“So Xi has entered this meeting in a much stronger position than he was in 2017, when he was worried about even a modest uptick in U.S. tariffs, and he's been able to blunt much of Trump's moves over the past year.” said Scott Kennedy, senior adviser at the Center for Strategic and International Studies.

The confidence is based on solid economic underpinnings. China owns about 90 percent of the world's rare earth refining, the critical materials needed for semiconductors, electric vehicles, military technology and electronics, and has been using more stringent export regulations as a bargaining chip against technology limitation from the United States. Beijing backed down from Trump's “liberation day” tariffs on Chinese goods which reached “more than” 140 percent in April 2025. It limited the flow of rare earths, observed the American manufacturers' scramble and waited. In the end, Trump caved in, granting tariff relief in exchange for resumption of critical mineral exports. That deal, which was reached at a South Korea APEC summit in October 2025, provided the blueprints for this week's meeting in Beijing.

Customs statistics from China suggest that shipments of a number of raw materials that China is the only country capable of producing on a large scale are still about 50 percent below levels recorded in the 12 months prior to Beijing's export restrictions. That is, China has not brought supply back to normal under the ongoing truce. That's a negotiating tactic in itself — reminding Trump, before he even landed at Beijing Capital International Airport, of what Beijing can do if negotiations go awry.

The United States is approaching this peak with an uneasy realization: It has been quickly spending its stockpiles of advanced weapon systems in the Middle East and Ukraine, creating significant gaps in its supply chains for rare earth elements and permanent magnets, two commodities China controls. Now, replenishment of missile systems, precision guided munitions, interceptors, and advanced electronics relies on even more access to materials that are nearly 100% part of the critical minerals supply chain in China.

This is the strategic setting in which handshakes and state banquets are a distraction. Trump came as a man looking for bargains. Before Xi's arrival, he had already milked the supply chain crisis he created.

The Taiwan Equation — and What Trump's Silence Means

In December, the Trump administration approved an $11 billion weapons package for Taiwan, the largest ever, but has yet to start delivering. That's not an administrative lag. It's a message and Beijing has picked up on it loud and clear.

But Trump's wavering on Taiwan has left, in Beijing's view, a license to push Washington on its Taiwan policy. He has expressed doubts about protecting Taiwan, pointed fingers at it for having lured away American semiconductor production, refused to accept a passage request from President Lai Ching-te, and even allegedly stalled the big weapons sale.

The two sides were silent in reporting the meeting in a telling way. The American readout of the first session, which was devoted to trade and the Iran war, made no mention of Taiwan. The Chinese readout, on the contrary, began with Xi's Taiwan warning. Two governments, one meeting, two totally different stories — and that's where the danger lies.

Taiwan was watching from Taipei with a certain guardedness. The island's government said it welcomed any measures which would help to ensure regional stability, and spoke of its "long-term support" by Washington, per a spokesman for the island's premier. It's diplomaticese for: we're scared, and we're watching.

The Deal Machine: Soybeans, Boeing, and the Art of the Headline by Jane Mayer.

Outside of the geopolitical fault lines, Trump's delegation came with its own commerce plan engineered for maximum optics. In the north wing of the Great Hall of the People, all 17 U.S. business executives, including the CEO of Apple Inc., Tim Cook, CEO of Nvidia Inc. Jensen Huang and CEO of Tesla Inc. Elon Musk, met with China's Premier Li Qiang.

As of Monday, Nvidia CEO Jensen Huang wasn't even on the White House's list. He only came because media reported he was missing then Trump himself called Huang and invited him, who flew to Anchorage and boarded Air Force One during a stop. Perhaps the most obvious single sign of the importance of AI chip policy to the summit's commercial agenda was his last-minute inclusion.

I would not be surprised if — as President Trump loves to make big headline announcements — he announces that China is going to purchase another $1 trillion of American goods, he said, including ‘a big buy' of Boeing aircraft and soybeans and beef. Experts also expect that Trump and Xi will make an announcement about China's intention to buy US soybeans or other farm goods that Beijing had boycotted during the trade war, doing a number on US farmers.

This soybean saga is a convenient microcosm of the overall relationship. The pain was felt first by American farmers in the Midwest, a key Trump stronghold, when China stopped buying in 2025. It would be a relatively small economic cost for China to resume those purchases, but would be a domestic political win desperately needed by Trump as his approval ratings are sagging due to the Iran war and the growing domestic inflation. “That's the tithe China can easily afford and pay in a way that caters to Trump's desire for a deal,” said one analyst.

The framing, Beijing as the patient, strategic actor measuring generosity just enough to deal with a transactional American president is present in almost every serious analysis of this summit from think tanks across three continents.

The Shadow of Iran in Talks to Talks.

In the negotiations on ending the war in the Middle East, Beijing possesses a certain leverage, given its status as Iran's largest trade partner and the biggest buyer of its oil. During the meeting with Xi, Trump spoke with him about the Iran war and the blockade of the Strait of Hormuz, but Secretary of State Marco Rubio told reporters that the U.S. had no request for China's assistance on Iran. That denial of need of assistance is fascinating in itself – it implies that the ask was floated and not landed well.

The two sides agreed the Strait of Hormuz needs to remain open to ensure "free flow of energy," and that Xi wanted to increase the amount of American oil China purchases in the future to lessen reliance on the strait, a White House official said. It's a nice bit of diplomatic judo — Xi promising to respect open shipping lanes as he offers to increase energy cooperation with Washington, which is not only good for China's supply diversification plans but looks cooperative.

The Thucydides Question

Maybe the biggest moment from Thursday's session was not a warning, but was a deal announcement. It was a question. Xi wondered if the US and China could skip the "Thucydides Trap" — which is the pattern of conflict often breaking out between a rising and ruling power. That it is a framework that a Chinese leader is openly calling for, in bilateral negotiations, is no rhetoric. It's a statement on the way Beijing views the long arc of the relations, and a pointed provocation that a good deal of the responsibility for avoiding catastrophe lies with the power that's no longer rising.

The meeting follows a South Korea meeting last October and may prove to be "a defining test" for the G2 power dynamic, as the US, China and EU have 60 percent of the world's GDP, HSBC Asia economist Justin Feng said.

The results of these two days will not solve any of the basic structural conflicts between Washington and Beijing. A full-blown trade agreement doesn't look like it is likely to happen, as the structural rivalry has not been resolved. Instead, there is a high likelihood that a limited agreement would be struck, perhaps a tariff freeze, buy-back agreements for rare-earths or structure for future negotiations.

However, describing this summit as just a trade deal is a category mistake. When Xi arrived at Beijing's Great Hall, he had more long-term goals in mind than just soybean contracts or Boeing orders. He came to tell, in front of the American president, on the record, that Taiwan is the line. That the rules of engagement around that island are Beijing's, to make up. That a superpower, dependent upon Chinese rare earths to rearm its missiles, Chinese factories to manufacture its consumer electronics, and Chinese goodwill to keep its Midwestern farm belt stable, is not in the best position to put up a fight.

At this week's state banquet, Trump said the talks were "extremely positive" and he invited Xi to come to the United States later this year. The next few months will tell whether that optimism is warranted or whether it is just the same transactional short-termism that has led American manufacturing supply chains to this point of vulnerability.