President Trump Goes to China 5/13/26

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0:37Order online in just a few clicks and choose delivery or easy in-store pickup. From fresh fruit arrangements to chocolate-dipped strawberries and decadent treats, Edible makes it simple to celebrate Dad with something fresh, delicious, and beautifully made. This Father's Day, skip the scramble, send a gift that feels special, and let Edible help make it all come together. Bring in show music, please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. An American in Beijing. President Trump's first trip to China in nearly a decade for a face-to-face meeting with China's President Xi. The plane has a few American business leaders riding along.

1:20Our Eamon Javers reports. A lot of CEOs are just hoping that this meeting can extend that trade truce as the first of possibly four meetings between Trump and Xi Jinping this year. What does Xi Jinping want from this meeting? We hear from Robert Kormatz, former Goldman Sachs vice chair and a former undersecretary of state. When President Trump goes there and asks for something, she will come back with a lot of confidence that China is an equal or close to an equal on technology and other things. And the historic significance is intense. They played a long game. Mao, in the 50s, when China was a developing country, made the point that we want to be able to catch up with the U.S.

2:05to avoid the U.S. pushing us around about 50 to 75 years. Plus, would you make AI your assistant, your friend, your doctor? The year of living artificial intelligence-y with Joanna Stern. Over the last year, did it get considerably better? Absolutely. It is Wednesday, May 13, 2026. Thanks. Squawk Pod begins right now. Stand under by in three, two, one, up and under. Good morning and welcome to Squawk Box right here on CNBC. We're live at the Nasdaq market site in Times Square. I'm Andrew Ross Sorkin along with Joe Kernan. Becky's off today. The Dow managed to close higher yesterday and put it down this morning.

2:49The Nasdaq was a big loser yesterday. It's up this morning. So I don't know what all that means. S &P was down a little bit yesterday, so not a new high, but there's been a lot of new highs recently. And President Trump, he went, you know, he went west. Why did I think, oh, they're flying over here, they're flying over? You'd go west, go west to go to China, obviously. Go west, young man. Oh, is it that much? I wonder what the difference is. I bet it's not because it's basically one around half the world, right? So it's like 12 hour time difference or whatever. So it must probably we said he went stopped in Alaska.

3:27Right. Right. So that made me think, oh, of course, of course you went that way. Remember when we on one of the recent attacks on Iran, I think we tried to be clandestine about it by not going east. We went all the way around about one time. Remember the jets so that they weren't expecting it. So but to go to China, that's the way you go. OK, I got it. I'm on the right page now. President Trump making his way to China. for a high-stake visit with the country's leader, and adding another corporate leader to his entourage. I think it sounds classier to say it like that. Eamon Jevers is on the ground in Beijing.

4:05He joins us with more. Now, why were you in Alaska for the president to pick you up, Eamon? Why did that happen? Yeah, it wasn't you? Yeah, it was not me, Joe. It was Jensen Wong of NVIDIA who was picked up in Alaska. He showed up on the tarmac and hopped on Air Force One and caught a ride over here. You are right, Joe. It is a 12-hour time difference. I can tell you from personal severe experience that the jet lag is real here. But look, we are expecting the president in about an hour and 45 minutes to be wheels down here in Beijing. And this is going to be a tale of corporate intrigue because we've got a lot of CEOs on this trip.

4:48We take a look. Elon Musk is on the plane. We're also expecting CEOs of Goldman Sachs and Apple and a whole host of other companies to be in country with the with the president. All of those CEOs have had a particular issue or another with the Chinese government over the years. All of them will be expecting to do some business while they're in town. The expectations here, though, among corporate folks that I've talked to in the run-up to this are pretty low, right? I mean, a lot of folks say they don't expect a major trade deal breakthrough here. And this is a story of how much this summit has changed just since it was put on the books.

5:25Remember, President Trump and Xi Jinping last met in October in Busan, Korea, and that was where they had that trade truce. A lot of CEOs are just hoping that this meeting can extend that trade truce as the first of possibly four meetings between Trump and Xi Jinping this year. We're expecting a reciprocal visit by Xi Jinping to Washington later on the year. The president said maybe November. We've heard maybe September for that one as well. We've got the G7 and the G20. So this is looked at as sort of one stop among many this year for these CEOs to be with the presidents in either the United States or China or a third country.

6:04So a lot of expectation here being minimized in terms of what the outcome might be on the trade front. And then, of course, we've got the Iran front. Right. That wasn't even on the agenda when this meeting was set up last fall. Now there is some expectation that the two leaders might be able to talk, maybe work something out on Iran as well. Again, a lot of expectation minimization on that front as well, Joe. So we'll see what happens here. We're expecting much less pomp and circumstance than we had last time. The president was here in 2017. That was a state visit plus a lot of hoopla, pomp and circumstance for that one.

6:42We're expecting a slightly stripped down version of that this time around. So we'll keep an eye on all of that for you here in Beijing. Joe? Yeah, I like the way you say, we'll see what happens. The president says that a lot. I was just musing, though, and after reading all the, you know, analysis, and some of it's good, some of it's not so great. But for me, I don't know if we're frenemies. China, maybe friend is too much of a, you know, it's not really frenemy. But we sort of have to put up with each other because of global trade. For some reason, I think that for China and for the United States, they're both in a position to make things sort of more positive and more conciliatory.

7:24China has stalled. There's just no doubt that they're trying to transform itself to a consumption economy. That has stalled. And they make gains, Eamon. But the personal GDP,$14 ,000 in China versus in the United States, I think it's$90 ,000. They're nowhere near the level of providing for their people the way the United States does at this point. Then I liken that, though, to Iran. They might not have, they don't have elections. Xi doesn't have midterms coming up. They don't have to care as much about the state of the overall populace, but they do want to move forward. So I don't know some of these intractable issues.

8:10It's in the interest of both parties maybe to try to come to some type of understanding. Yeah, the buzzword you hear here and sort of in foreign policy circles in Washington around this meeting is stability. The idea that both of these countries, you're right, Joe, both of them right now have an interest in stability. The Chinese economy, as you point out, is not great right now. When you talk to people on the street here in Beijing, you get a sense that this is an economy that has slowed. It's not as bad as it has been, you know, certainly during the COVID years, which were pretty tough here.

8:42But, you know, you do get a sense that restaurants are hurting a little bit for business and that sort of thing. So they do want some predictability, some stability, both in the trade relationship and in the Iran situation. China gets a lot of oil from the Strait of Hormuz. They really depend on that being open and they're going to want to see some resolution to that situation as well. And, of course, the Iranians are something of a proxy for the Chinese. So the Chinese have a lot of leverage there as well. So the question is, can the president's, you know, face to face come up with some sort of solution to that situation?

9:17A lot of skepticism that there will be some sort of ultimate solution here, but maybe just a work through or work around that can work for the time being. Again, that buzzword being stability. The restaurant said, can you give me firsthand knowledge of is it happening? Are there great Chinese food? I understand it's possible. They do. They do have a lot of Chinese food here. Look, Joe, you haven't lived until you've had Peking duck in Peking. It's really good. It's really good. We've had a chance. We've been on the ground here for a couple of days. Not Beijing duck. It's called Peking duck on the menu.

9:54And it's fantastic. Little plum sauce. Really terrific. We had a chance. We got out to the Great Wall. We got out to Tiananmen Square earlier today. Saw the Forbidden City. So this place is packed with tourists. So it's not like the economy is suffering so much that tourists from the interior of China can't come because I waited in line behind a lot of them. You don't need to answer, but do you like have a burner phone? I mean, how much do you think about, you know, you're using your normal equipment? I bet you have to think about that, don't you? Yeah, we do. And there's a whole procedure for that.

10:31We've taken a lot of security precautions. Yeah, just leave it in. Yeah. Yeah, and that's all I'll say about that. Yeah. Okay, good. But I've got a code name. You can message me on the code name. I'm not sure any of it will work, right? I mean, I'm not going to go toe-to-toe with the Chinese services. Is it a cool code name? You should have a cool one. It's really, really cool. But I'm not going to tell you what it is. Okay, you'd have to kill me. All right. Thank you, Eamon. We'll see you again. Companies looking for tariff refunds after the Supreme Court ruled that President Trump's levies in their current form, the tariffs, were unconstitutional and started to receive payments.

11:14The CFO of heavy truck maker Oshkosh, Oshkosh, did you ever have a... Oshkosh bagosh. That's what I was going to ask you. Absolutely. Some overalls. Did you wear those like up at Cornell or something like it? No, as a child. As a child. As a child. As a child. a child. Yes. I had a guy who went to school. That's all he wore. Oshkosh bagai. Yeah, in college. It was like, you know, this was the 70s. Anyway, Oshkosh confirming to CNBC his company started getting paid back yesterday. I hate even admitting that. When did you graduate? 1999. Toy company Basic Fund also said it began getting refunds.

11:57Its CEO told CNBC that the company will use the money to help support 2026 cash flow and to increase employee salaries and give larger merit increases. In a radio interview, President Trump called the tariff refund situation, in his words, crazy. Separately, an appeals court has temporarily paused a lower court ruling against the Trump administration concerning 10 % tariffs that the White House instituted after its earlier tariffs were ruled unconstitutional. Yabba-dabba-doo. Okay. Is that Ofcom? No. No, that's the Flintstones. I know that's the Flintstones. From the Stone Age. Oh, because I was born in the...

12:37Okay. I can see where... Yeah. All right. All right. We're just going to start playing that... 99? We're going to start playing the Flintstone theme song when Squawk Box... 99? Yabba-dabba-doo. But none of the people that you know even know what the Flintstones are, I don't think. Do they? I mean, so many cultures... I see things on Twitter where they say, do you know this person? It's like the most famous person in the world. You know what I mean? It's like, but people don't know things that happened before the year 2000. Sad for me. Sad for me. We landed on the moon. And it said in approving Kevin Warsh to join the Federal Reserve's Board of Governors, the vote was 51 to 45.

13:22Democrat John Fetterman crossed party lines to approve Warsh. The only one. A vote to make Warsh chair of the Federal Reserve is expected today. Jay Powell's term as chair expires on Friday, though he's indicated he'll stay on the Federal Reserve Board. Coming up, we're going to talk about President Trump's China trip. The former Undersecretary of State Bob Hormats goes way back. I read that. I couldn't be to the Nixon administration, but he goes way back. Another very wise man. Rockbox will be right back. It's sort of a social contract. They, the people, will follow the Communist Party and Xi.

14:00But the Communist Party and Xi have to deliver better standards of living. And they have a lot of unemployment and they have a lot of problems in the real estate sector.

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14:51Just use code CASHAPP10 when you sign up and, don't forget this part, send at least$5 to a friend in the first two weeks. Terms apply. Cash App is a financial services platform, not a bank. Banking services provided by Cash App's bank partners. Bitcoin services provided by Block, Inc. Brand. For additional information, see the Bitcoin disclosures at cash.app. slash legal slash podcast. Still figuring out Father's Day? We can arrange that. Skip the tie, skip the last minute panic. With Edible, it's easy to send a gift dad will actually want. Order online in just a few clicks and choose delivery or easy in-store pickup.

15:28From fresh fruit arrangements to chocolate dipped strawberries and decadent treats, Edible makes it simple to celebrate dad with something fresh, delicious, and beautifully made. This Father's Day, skip the scramble, send a gift that feels special, and let Edible help make it all come together. This summer, the Atlas Obscura podcast is going on a World Cup adventure. From late May to mid-July, we are dropping special episodes every Monday and Wednesday, exploring the strange, incredible, and hidden places in all 16 host cities. Think unexpected museums, secret landmarks, stories you won't find in any guidebook.

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16:20Welcome back. You're listening to Squawk Pod from CNBC. Today with Joe Kernan and Andrew Ross Sorkin. Stand by Joe in five seconds. Four, three, two, one. His mic is here. All right, Bob Format, let's get to talk about President Trump's two-day summit in China with President Xi Jinping. Elon Musk, Jensen Wang, Tim Cook, and more than a dozen other top executives are going to join the president. Joining us now, Bob Hormats, former vice chairman of Goldman Sachs International, served in both Republican and Democratic administrations in a variety of roles, including undersecretary of state and going to break.

16:57I said, I think you were in the Nixon administration. And I said, no, that can't be right because you're still a young man. But now you tell me, you were 24 years old, You were part of, I guess, the Nixon contingent that met with Mao Zedong. I didn't go on the Nixon visit. But you were working with Kissinger, right? I worked with Kissinger and did a lot of the planning on the economic stuff for the Nixon visit, since I was Kissinger's economic advisor. I always say when I was alive for these things, I did not realize that Nixon actually, that Mao was still around. Mao was still around. He was in his 80s, but still quite knowledgeable and thoughtful.

17:36And Nixon and Mao had actually some very good conversations. Kissinger and Joe and I did a lot of the planning for the meeting, but Nixon himself wanted to go. He'd been a strong anti-communist, but he also realized that China was a rising power and the United States had to have a relationship with them. That was a major thing that Nixon did that is causing, I think, his entire narrative, historical legacy to be revisited. Or at least it should be, because that was so monumental. Monumental. And it was Nixon and Kissinger who decided it was not a popular thing necessarily in the U.S. Right. But they realized that this was a rising power.

18:17And now, years later— Now we know. China—now we know. And for the first time in nearly 100 years, the United States is negotiating with a peer great power. Kind of. In many areas, not every area. But certainly from a military, political, economic, and technological perspective, they're the most broadly based competitor and most advanced competitor we've had to deal with in many years. And they have that sense of confidence. How many people died in the Great Leap Forward? Yeah. 20 to 30 million people started. No food. So that was my point. And what I was getting to is now, I'm not an admirer. I'm sorry.

19:02People that have a picture of Mao on their desk, I think, have a screw loose. And I was going to ask you whether President Xi is different fundamentally in his view of what he wants to bring to the 1.4 billion people that live there. Then I don't know what Mao was thinking. I think Mao wanted to make China preeminent. And I think. Definitely. And I think Xi wants to do the same thing. Is it sometimes at the expense of the Chinese people? Well, that's a very good question. Mao had two major preoccupations. One, he kept referring to the fact that we were bullied in the last century by the foreigners because we were weak and divided, and they'd had a civil war, as you know.

19:42And second, both he and Xi, but particularly Xi, did a lot of work on why the Soviet Union fell apart. And she concluded that it was because the party had gotten weak, they'd become too dependent on a few commodities, particularly steel and energy, but not a broadly based economy. They only had a very few trading partners and they were vulnerable to the U.S. She wants to create a situation where none of those happen. He wants to diversify his markets and his supply chain. He wants to avoid being bullied by foreigners. He wants to make sure that when he does something, he has a united party behind him.

20:27What's all that mean for what President Trump tries to do? It means that when President Trump goes there and asks for something, Xi will come back with a lot of confidence that China is an equal or close to an equal on technology and other things and will stand up to him and has leverage over the U.S. It used to be that foreigners had leverage on China. Now, for the first time, China has leverage over foreign. But just how much is, I think, a question. So personal GDP in China,$14 ,000. How much lower than that? Personal GDP in the United States is$90 ,000. Much lower than that. My point was that whether Xi cares about people has a direct bearing on how tough a stance he takes against the United States.

21:15Well, he cares about two things. One, not being bullied. He cares about China asserting itself at the expense of his people. Well, then that was the second point. And that is, the one thing about China is they're sort of a social contract. They, the people, will follow the Communist Party and Xi. But the Communist Party and Xi have to deliver better standards of living. And they have a lot of unemployment, and they have a lot of problems in the real estate sector. and Xi does care about those, which in part is why I think this is going to be a relatively tranquil summit. Xi does not want to be dust-up with the U.S.

21:51He has to concentrate on a lot of domestic things. Then he's playing the long game still, isn't he? They play the long game. All the time. Even Mao in the 50s when China was a developing country made the point that we want to be able to catch up with the U.S. to avoid the U.S. pushing us around. And that'll take about 50 to 75 years. Do you think, I don't know why we didn't book a longer segment because you're so knowledgeable on all these things, but do you think that there will be some attempt by Xi to get Trump to change, President Trump to change our stance on Taiwan? Absolutely. He's going to try and get...

22:31He will do two things. One, he'll try to get language out of Trump that sort of implies that the U.S. wants to have a peaceful solution to Taiwan. That includes it becoming part of China. He won't say that precisely, but he'll make sort of innuendos that say, we understand why China wants to get closer to Taiwan and encourage the two of them to work out their differences in a positive way. He won't, I don't think insists that they unify, but I think he will give positive statements that Xi will find helpful. But the other thing is Xi looks at the U.S. and says, look, the U.S. is overextended in certain parts of the world.

23:19We're preoccupied with Iran, which is sort of a semi-ally of China. But now it gives Xi an opportunity to expand China's military presence throughout the South China Sea and the East China Sea, all these little islands or semi-islands or ROPs that have been made into Air Force bases, quite extensive, big ones, and that China now has an opportunity. It's not so much to invade Taiwan, but it's to extend its military presence in the region, making it more difficult in case they ultimately do for the United States to intervene. Will the president's predilection to wanting to make deals and trade deals, will that cause him to maybe become too close to China and accept it?

24:11Let's say they say we're going to invest a trillion dollars in the United States. Do we security concerns be damned? Do we let something like that happen with the allure of a huge investment in the United States? That's one of the things that Xi is going to test at this meeting. Should he say yes or should we not? I think he has to. We're selling the Taiwanese a lot of military equipment. So it's not that we're abandoning them. But I do think that the allure of these big deals made by big CEOs, either in terms of investment on the mainland of China or in terms of working with Chinese companies to get them to invest here, well, Trump will come back and say, well, this trip created a lot of jobs here, or companies that have difficulties in dealing with Chinese regulations, they'll try to work them out.

25:03But I think if you talk about awe, you're seeing the top CEOs of the top American companies going there, and the Chinese want to get their economy going. They certainly are doing extremely well from a technological point of view, but they also want to establish more partnerships. What they don't want to do is become dependent on American technology because their concern is that if they get too dependent on American technology, then the United States can use that as leverage. Or the rare earth stuff that we're dependent on. And we're dependent on their rarests, but they don't want to be dependent on our chips because they see the United States as, first of all, unpredictable, but they see it as a country that would use leverage, perhaps in certain situations.

25:53They don't want to be in a position where they're— Well, we're going to see so much written about, you know, half the articles are going to be that we were taking in the cleaners, and the other half are going to be that it was a great deal, and we need you to come back. I think it'll be somewhere in the middle. I think it'll be—I think they want tranquility. I don't think they want dust up. But they will have controversial conversations over what China is doing to support Iran. The president's certainly going to raise that. And Xi will certainly raise Taiwan and opportunities that he sees for China to play a greater role in the whole Asia-Pacific region with the Americans preoccupied somewhere else.