[Global Focus] Previewing the U.S.-China Summit: Trade Takes a Backseat, Geopolitics Moves to the Forefront

Iran and Taiwan Emerge as Key Issues at the U.S.-China Summit
U.S. Seeks Achievements, China Seeks Time: Diverging Calculations

The U.S.-China summit scheduled for May 14-15 is expected to focus on the Iran war and the Taiwan issue as its main agenda items. Last year, when U.S. President Donald Trump met with Chinese President Xi Jinping, the discussions centered on tariffs, but this year, it is expected that both sides will focus their efforts on resolving geopolitical issues. Advanced technology, such as artificial intelligence (AI), and tech-security topics like rare earth elements, are also anticipated to heat up the negotiation table.

This U.S.-China summit comes six months after the two leaders last met in Busan on October 30 last year. This marks the first visit by a U.S. president to China in about nine years, since November 2017 during the first Trump Administration.

Since President Trump took office, the U.S. and China had engaged in a trade war, imposing triple-digit tariffs on each other. However, after the October summit in Busan last year, both nations have been in a state of truce for a year. Last year, in the lead-up to the summit, the two countries held several high-level talks for prior coordination; this year, such diplomatic prelude has taken a backseat.

At that time, President Trump had threatened China with harsh rhetoric, but currently, he has not issued any notable public statements toward Beijing. He has been busy crafting an exit strategy for the Iran war. The visit to China, originally scheduled for late March to early April, was postponed due to the Iran conflict. However, ahead of the summit, the U.S. did not hesitate to pressure China over its support for Iran. The U.S. Department of State and the Department of the Treasury imposed sanctions last month on Hengli Petrochemical, the largest of China's teapot (independent) refineries. By cutting off Iran's financial flows, the U.S. has tightened restrictions on China's energy imports ahead of the summit.

Thus, there is a prevailing view that the Iran war will be a major agenda item at this summit. Key members of the Trump Administration are urging China to exert influence over its ally, Iran. On May 4, U.S. Treasury Secretary Scott Bessent criticized China in an interview with Fox News for purchasing 90% of Iran's energy and thus funding Tehran. He called for help in resolving the blockade of the Strait of Hormuz. On the same day, U.S. Secretary of State Marco Rubio also stressed that China should directly tell Iran "not to hold the global economy hostage." On May 6, Jamieson Greer, U.S. Trade Representative, told Bloomberg TV that the issue of China's purchases of Iranian energy could be discussed at the summit, stating, "Iran is the world's largest state sponsor of terrorism. Anyone who buys Iranian crude oil is complicit."

China also appears to be paying attention to the Iran issue to strengthen its negotiating power at the summit. On May 6, Iranian Foreign Minister Abbas Araghchi visited China at Beijing's invitation. Danny Russel, a fellow at the Asia Society Policy Institute, analyzed that, ahead of President Trump's visit, China is trying to project itself as a responsible great power while minimizing risks to itself. He noted that while China is drawing a line against appearing fully aligned with Iran, it is also highlighting its role as a nation capable of dialogue with Tehran.

Indeed, Chinese experts argue that the protracted Iran war has put China in a more favorable position to exert influence over Iran. Wu Xinbo, Director of the Center for American Studies at Fudan University, stated, "When the war first broke out, there were concerns that if a pro-Western regime emerged in Iran, it would not be advantageous for China. The current situation is unfolding in a direction favorable to China."

China is expected to demand a shift in the U.S. stance on the Taiwan issue during this summit. The Taiwan issue was not mentioned at last year's summit in Busan, but this year, Beijing may call for changes in Washington's attitude toward Taiwan.

In a phone call with President Trump in February, President Xi emphasized that the Taiwan issue is "the most important issue," stating that China will not tolerate the island's separation and that the U.S. should exercise caution when selling arms to Taiwan. Li Qiang, China's second-ranking official, also met with Senator Steve Daines (Republican-Montana), a close associate of President Trump, on May 8 and stressed, "The Taiwan issue concerns China's core interests and is the first red line that cannot be crossed in U.S.-China relations."

The U.S. side is also aware of this. Secretary Rubio said on May 4 that the Taiwan issue would be a topic of discussion during President Trump's visit to China, stating, "We do not want any destabilizing events related to Taiwan or any region in the Indo-Pacific, and this is in the mutual interest of both the U.S. and China."

From China's perspective, having the U.S. change its stance on Taiwan through this summit would be considered a significant political achievement. The Brookings Institution has indicated that China is signaling it cannot ignore the Taiwan issue, and that President Xi could urge changes in U.S. foreign policy, including the island's legal status. It is also possible that China will demand that President Trump restrict arms sales to Taiwan. Bloomberg has reported that the Taiwan issue is extremely important to Beijing, and that President Xi may pressure President Trump to shift his position against Taiwan's independence during the summit.

It is expected that the U.S. and China will also put global technology leadership issues, such as semiconductors and artificial intelligence (AI), on the table for negotiations. The Wall Street Journal (WSJ) has reported that responses to advanced AI may be included as a topic at the U.S.-China summit. There are also discussions about launching an official dialogue channel on AI, led by Secretary Bessent. The New York Times (NYT) has also stated that generative AI could be on the agenda.

However, it is highly likely that the U.S. will continue to impose technological restrictions on China in key sectors such as AI and semiconductors. On April 23, the White House publicly criticized foreign companies, including those from China, for allegedly trying to steal U.S. AI technology.

China is expected to use rare earth elements as a bargaining chip to counter U.S. technological restrictions. During the Iran war, the U.S. depleted a large amount of its weapons stockpile, and in order to replenish and reproduce these weapons, it is essential to acquire rare earths such as gallium, which are monopolized by China.

Other topics expected to be discussed at the summit include additional purchases of U.S. soybeans by China, purchases of Boeing aircraft, and the extension of the trade truce. CNN has reported that President Trump wants to demonstrate visible achievements to U.S. voters ahead of the midterm elections, such as large-scale Chinese purchases of U.S. agricultural products and Boeing aircraft. However, experts and foreign media generally believe that, rather than reaching major agreements, the summit will likely end with an extension of the trade truce signed last October and a few other transactions.

There is also interest in whether a meeting between North Korean leader Kim Jong Un and President Trump will be arranged again. Kurt M. Campbell, former U.S. Deputy Secretary of State, said on May 7 in a meeting with journalists that President Trump may seek advice about engaging with Kim Jong Un during the U.S.-China summit. President Trump has previously asked China for assistance regarding the North Korea issue.

Some analysts believe that the summit may not produce any major agreements. Jennifer Welch, Chief Geoeconomics Analyst at Bloomberg Economics, said that China is not expecting much from this summit, commenting, "China is seeking stability." Jonathan Chin, a Brookings Institution fellow and former CIA officer, also explained, "China's core objective is to continue to secure time and flexibility even under U.S. pressure."