By Joe Cash, Trevor Hunnicutt and David Brunnstrom
BEIJING/WASHINGTON, September 21 (Reuters) – In the four months since the leaders of the world’s two largest economies last met, Xi Jinping has overseen a significant expansion in China’s global trade, while Donald Trump has grappled with declining approval ratings at home.
That reversal in fortunes has tempered expectations for their summit in Washington this week, according to analysts. Xi appears in no hurry to make concessions, while Trump faces constraints from a costly conflict with Iran that has dented both his popularity and household budgets.
Although sensitive issues such as Taiwan may arise, the central focus of the September 24 meeting is whether the two leaders will signal an extension of the trade truce reached last year that averted a major disruption to the global economy.
“Xi is not really looking for anything tangible. He wants to extend the gentleman’s agreement with Trump so that China has time to fortify itself,” said Jon Czin, a foreign policy expert at the Brookings Institution who previously served as China director at the US National Security Council.
‘LIVING IN XI’S WORLD’
White House officials have sought to temper expectations of a landmark breakthrough. US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng led preparatory talks in New York on Sunday, aimed at laying the groundwork for potential agreements on artificial intelligence guardrails and trade in non-sensitive goods.
This is a marked departure from Trump’s pledge upon returning to office in 2025 to use tariffs to address what he called a trade imbalance with China that was “killing” the United States.
However, since agreeing the truce with Xi in October of that year, his focus has been split across a range of foreign policy challenges, from the conflicts in Iran and Ukraine to disputes with European allies over free speech.
China has encountered its own headwinds, including weakening domestic demand and a prolonged property sector crisis, yet the export engine that Trump sought to rein in has continued to surge — what economists are increasingly calling “China Shock 2.0.”
China’s global trade surplus is on track to exceed $1 trillion for a second consecutive year.
While US measures targeting the low-value parcels that online retailers such as Shein and Temu depend on have shown results, more than half of the roughly 6,500 product categories China sold to the US during the first part of this year have grown compared to 2025.
A delegation of Chinese business leaders — potentially including firms currently facing US regulatory scrutiny as they seek expanded market access — is expected to accompany Xi to Washington.
The Trump administration “thought they could use massive unilateral pressure to force China to make concessions, and that did not occur,” said Scott Kennedy, an expert on the US-China economic relationship at the Washington-based think tank CSIS.
“Now this is Xi Jinping’s world, and we’re all living in it.”
TAIWAN AND TRADE WINS
If Xi is indeed steering the agenda as analysts suggest, this could further unsettle US allies in Asia, who anticipate the Chinese leader will urge Trump to soften Washington’s support for Taiwan, the democratically governed island that Beijing claims.
Xi raised the Taiwan issue repeatedly during their meeting in Beijing in May, including questions about arms sales and Washington’s commitment to the island’s defense, Trump told reporters.
The US president described a forthcoming $14 billion arms package for Taiwan as a “negotiating chip” with Beijing.
Some officials in Taipei and Tokyo worry he may be tempted to trade that chip for political gains ahead of November’s midterm elections, which could prove difficult for his Republican Party.
Potential concessions could include Chinese purchases of Boeing aircraft or agricultural products, or commitments to restrict the flow of fentanyl precursor chemicals that have fuelled the US opioid crisis.
“China-US ties have become more transactional,” said Wu Xinbo, a professor at Shanghai’s Fudan University who advises China’s foreign ministry.
While Washington may seek to prioritise trade discussions, for Beijing, the US stance on Taiwan remains pivotal, he said.
“If you accommodate our concern on the Taiwan issue, then we would be willing to accommodate your concerns on other issues, be it law enforcement or purchases of US agricultural products,” Wu said.
PUTTING PRESSURE ON IRAN
Washington also views Xi as uniquely positioned to pressure Iran to bring the conflict to an end — a war that has driven Trump’s approval rating to the lowest point of his political career.
However, Xi has shown little inclination to do so. Reuters reported earlier this month that Beijing is selling billions of dollars’ worth of goods to Iran through a sanctions-evasion scheme. China’s foreign ministry says it is not aware of such a scheme.
US threats last month of secondary sanctions against countries engaging in trade with Iran — which Bessent termed an “Economic D-Day” — do not appear to have been enforced against Tehran’s largest trading partner.
This further suggests, analysts say, that Trump is keen to maintain stable relations with Xi while he directs his attention elsewhere — an arrangement that also serves the Chinese leader’s interests.
“Both Xi and Trump feel it’s quite helpful to have stability in the relationship so that they can focus on more pressing things,” said Ruby Osman, senior geopolitical researcher at the Tony Blair Institute for Global Change.
“For Trump, that is Iran. For Xi, that is building out China’s domestic resilience for whatever comes after Trump.”
