Trump and Xi to Meet at High-Stakes Summit

0:07Today, for the first time in almost 10 years, an American president is in China.

0:20President Donald Trump has landed in Beijing for a high-stakes summit with Chinese leader Xi Jinping. As Trump stepped down from Air Force One, a crowd of Chinese students greeted him on the tarmac, waving little U.S. and China flags.

0:39The last time a president made this trip was Trump himself, back in 2017. I called up our colleague Annie Linsky, who covers the White House. She got into Beijing earlier this week. What is the vibe on the ground in terms of preparations for the summit? Yeah, the city does feel very ready for the summit. This is going to take place over two days of meetings, but it's a highly symbolic event. It's going to involve a lot of ceremonial moments. Trump is going to have tea with Xi. He is going to get a tour of the Temple of Heaven. So there's going to be a lot of one-on-one time between the two leaders.

1:23That sort of personal bonding is quite important to President Trump. He really does see the personal relationship between leaders as critical and sort of informing how the actual relationship between the two countries can be. So if he feels that he kind of has a read on a leader or has a good relationship with that leader, he does feel like he can understand where that person will go in terms of negotiations.

1:53What is at stake for the two countries this week? What's at stake for the two countries truly is a sort of moment to show the world that the two most powerful nations can work together. Now, this isn't to say, you know, this is going to be a chummy conversation. It's not, you know, all smiles and giggles for sure. It's not going to end with the two countries suddenly becoming allies. Right. This is about two rivals strengthening a way of talking to one another. And I think that's why it's so important.

2:29Welcome to The Journal, our show about money, business and power. I'm Jessica Mendoza. It's Wednesday, May 13th.

2:42Coming up on the show, what's in store for Trump and Xi in Beijing?

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4:02Trump started his second term taking a hard stance against China. When the administration imposed global tariffs last spring, it targeted China with some of the highest duties. China hit back with retaliatory tariffs on a wide range of U.S. imports. That kicked off a tit-for-tat that reverberated across the global economy. Look, Trump looks at these tariffs as a negotiating point. That's how he has presented them to other nations. But China was a particularly stark example because the tariffs that the U.S. levied were just so high initially. And the response from China was so stark. And it did show for a moment that these two countries, really the two superpowers, were on this track for a very contentious relationship.

4:52Things settled down later in the year. The two sides held rounds of negotiations. And then last October, Trump and Xi met in Busan, South Korea. They struck a trade truce during that meeting, agreeing to lower tariffs and winding down export controls for key industries. That Busan meeting really did calm things down a little bit. And I think one of the expectations out of this meeting will be that that trade truce will be extended for a longer period of time. For Trump, how much of the summit is about looking for a win on trade and ultimately the economy here in the U.S., especially with midterms approaching?

5:34Trump very much would like, and certainly Trump's advisers would like, in an ideal world, to walk away from the summit with a host of headlines about big investments from China. There's been an expectation that there will be an increase in purchases of soybeans, of beef. Trump is looking to come back to the U.S. with a raft of deals so he can show the heartland that the Chinese are buying some of these goods and this trade war is settling. Trump is also looking to boost American aircraft manufacturer Boeing. It's one of the biggest companies in the U.S., and it's counting on China to place a big order of Boeing aircraft.

6:13Boeing's CEO is going to be part of the delegation where there's probably a strong signal there that there's an expectation of some additional planes being purchased by China. That purchase could mean billions of dollars for Boeing and a significant shrinking to the U.S.-China trade deficit. The Boeing CEO is just one of many prominent business leaders from across tech and finance who've joined the U.S. delegation. The list includes Tesla's Elon Musk, Apple's Tim Cook, and NVIDIA's Jensen Huang. The message is hard to miss. Economic and business issues are the priority of the summit. But there's something else hanging over negotiations that may end up dominating the talks.

6:57Iran just continues to loom. Coming into this meeting, it is, I sort of can't overstate how much it's overhanging the meeting. And, you know, questions swirling as to whether that ceasefire will break. So, you know, that is very much top of mind. What has been China's involvement in the war in Iran so far? Well, they have a close relationship with the Iranians. The Chinese are major purchasers of Iranian oil, but they also supply weapons and intelligence to the Iranians. So they have a close relationship with this regime that has been antagonizing U.S. presidents for nearly 50 years. But this gives the Chinese leverage to push their Iranians to go to the negotiating table to say enough is enough.

7:45The Strait of Hormuz has to reopen. So if the Chinese say, hey, look, this is becoming a problem and we are willing to cut off some of that funding, the Iranians really do have to listen. The president has in the past pushed Xi to help make that case to the Iranians and get them to the negotiating table. And we expect that to continue at the summit. Why would the U.S. turn to a military adversary like China for support in this effort to negotiate with Iran? Xi is very interested in a ceasefire. The Chinese are major, major purchasers of Iranian oil. He wants that strait to be reopened, as do many other countries in the world.

8:28And some experts we've talked to have said that this moment also personally gives Xi a win where he can be seen as mediating the end of what could spiral into a global problem, that Xi becomes, in a sense, a peacemaker. And that's a role that benefits him and his stature. So he has—there are some personal reasons for him to want personally to be involved. But the brass tacks reasoning here is that the United States certainly benefits from that straight reopening, and so does China. Well, thank you so much for taking time to chat with us from halfway across the world. Thank you. Trump is expected to make some big demands from Beijing.

9:14And Xi Jinping is likely to ask some big favors in return. At the top of the list, Taiwan. For Xi Jinping, nothing matters more than Taiwan. And every other agenda item is negotiable. Taiwan is not. That's after the break.

9:49Can you introduce yourself, please? Tell us what you cover. Sure. My name is Lingling Wei. I am the chief China correspondent for The Wall Street Journal. Lingling is also following the U.S.-China summit. She says there's always a big scramble to get ready to host a foreign leader, especially when it's the U.S. president. A lot of hard work goes into planning such a summit, right? hundreds of officials on each side have been spending months preparing for this bilateral between Trump and Xi. It's just this unseen theater of great power competition, great power diplomacy. Both theaters certainly want to project strengths, you know, to their own audiences at home and also to the rest of the world.

10:39And they both likely will claim a win. For Xi, the win he's looking for has to do with Taiwan. The island off the coast of mainland China is a critical economic powerhouse that China claims. The U.S. has historically signaled support for Taiwan's autonomy. He is expected to make a very aggressive push to extract some linguistic concessions from President Trump. For example, he wants President Trump to more definitively say that the U.S. oppose Taiwan independence. Also, you know, Xi might want President Trump to say something like, you know, we support peaceful reunification. You know, that's the kind of language favored by the Chinese government.

11:33So those word changes the Chinese are seeking might sound really technical, right? But if they do succeed at getting those concessions from President Trump, that would unravel decades of strategic ambiguity on the U.S. side. It's interesting that you say linguistic concessions, so not military ones necessarily. Is there a distinction there? Yes, there is a distinction there. So Xi Jinping is expected to press President Trump not to approve any large-scale arms sale packages to Taiwan, at least not, you know, immediately after the summit, right? So there is a military component to the Taiwan-related discussions.

12:27But the Chinese, they are realistic. They are not expecting to make any kind of breakthrough in terms of getting the U.S. to completely change its Taiwan policy.

12:45Are there signs that the U.S. or Trump would be open to budging on this issue and giving them the concession that they want? So the signal we have got so far from senior U.S. officials is that Trump's preparation for this coming summit hasn't included any plans for the U.S. to make a shift on its policy stance toward Taiwan. So that reporting really is the strongest public signal that the language will hold. Secretary of State Marco Rubio has also reinforced it publicly. We don't want to see any forced or compelled change in the situation now. We think we'd be destabilizing to the world. Like Trump, Xi is also facing economic pressure domestically.

13:38The Chinese property sector, which for years was booming and creating lots of jobs, has seen a massive decline since 2021. And overall, economic growth has slowed down drastically. We have seen persistent deflation in China, very weak household consumption. And we also see youth unemployment remains very high and is a very politically sensitive problem for the Chinese leadership. None of those things I have talked about really threatens Xi's grip on power, but it really shrinks his margin for error. And the sharp escalation with Washington, that would be the one thing that could turn a manageable slowdown into a big political problem for Xi Jinping.

14:30That is why he needs this summit with Trump. China's domestic economy is very fragile, and Xi needs predictability from Trump. One industry that China has leaned heavily on to boost its economy is AI. It's a key sector that's received tons of state support. Both the U.S. and China want to establish a stronger dialogue on the future of this technology. Both countries are trying so hard to beat each other in this AI race. And both U.S. and Chinese officials have confirmed to us that President Trump and Chinese leader Xi Jinping will talk about AI. Specifically, they will explore whether or not to open formal lines of communication between these two governments on AI safety and security risks.

15:26And there is some echo to the Cold War era, right, when Washington and Moscow maintained lines of communication over, you know, nuclear arms control. When you talk about open lines of communication, what are they trying to solve for? So inevitably, there have been a lot of security-related concerns. You know, for example, how does either side define autonomous weapons system, right? How do you define crisis communication protocols for AI-driven incidents, right? All those issues would need a certain type of dialogue to make sure that you don't have a crisis, right? You know, one context we need to take into consideration when we think about AI risks is that both Chinese and American militaries are integrating AI at very fast speed, right?

16:36that the risk of a system-level miscalculation is no longer theoretical. But there are some sticking points, because the two countries are still blocking each other's access to the materials needed to scale AI. China wants relief from expert controls on advanced semiconductors, AI chips, and the equipment to make them. Without those things, China's AI and high-end manufacturing ambitions would hit a wall. So a big question is whether or not there will be any kind of easing on the U.S. side on chip export controls. You know, some people have told us export controls are really not on the table for discussion, but we'll see.

17:23Where does China have the upper hand in these negotiations? What China has in these negotiations is choke points on things like rare earth minerals. Over the past year, we have already witnessed Beijing willing to weaponize the flows of those minerals essential for the manufacturing of laptops, cell phones, defense systems, you name it, right? China has weaponized those minerals as a way to try to get the U.S. back down in terms of tariff threats. So it's interesting because it does sound like there are things that each side wants from the other. Like there is leverage on each side, but everybody needs to walk really carefully if they want to maintain the detente that they've set up.

18:17So neither side really believes anymore that they can change the other side. Yeah. The honest project now is engineering a strategic separation or strategic decoupling that doesn't take the entire global economy down with it. So it's really managed competition, managed rivalry, and transactional detente. Transactional detente. Ultimately, this summit is about maintaining stability and the small steps it takes to build bridges. Stability matters. Predictability matters. The markets do not like uncertainty, right? Consumers also want to make sure that inflation doesn't go through the roof, right?

19:10So the deliverables we will see at this summit, some soybeans, maybe some Boeing purchases, you know, a rare earth extension trade truth extension, they will all look modest. But that's the point. The new shape of this relationship isn't a grand bargain. It's a series of small transactional truths that keep the floor from falling out. The question for the next few years is whether that floor holds. Well, Lingling, thank you as usual for your insight. Thank you for having me. The Beijing Summit will kick off on Thursday morning local time. with a welcome ceremony at the Great Hall of the People.

20:00From there, the two leaders will begin bilateral talks. Earlier this week, Trump predicted that, quote, great things will happen for both countries.

20:19That's all for today, Wednesday, May 13th. The Journal is a co-production of Spotify and The Wall Street Journal. Additional reporting in this episode by Gavin Bade and Alex Ward.

20:33Thanks for listening. See you tomorrow.