Trump-Xi summit: High stakes for the US, China and the world

"Good things take time," as the old saying goes. After postponing his trip in March after launching the war with Iran, US President Donald Trump is set to visit China's leader Xi Jinping in Beijing at the end of the week.

The meeting comes as the world still faces an ongoing energy crisis due to the Strait of Hormuz blockade,and while peace negotiations between Tehran and Washington seem to be deadlocked. Moreover, trade disputes between China and the US still lurk from behind the scenes.

Against this backdrop, both countries have an incentive to ensure the meeting between the two leaders comes off as a success. Neither Trump nor Xi are ready to lose face. Both want to remain the "strong man."

"Trump desperately needs some good news on the foreign policy front," said Chu Yin, a political scientist at the Beijing-based Pangoal think tank and a former professor at the Beijing University of International Relations.

"Trump's poll numbers are in the gutter ahead of the midterm elections in November. Apparently, his plan to quickly bring Iran — an ally of China — to its knees through preemptive military strikes, celebrate his triumph in Beijing, and use it as a bargaining chip did not work out," Chu told DW.

Chu added that Trump must now pin his hopes on reaching at least a partial agreement on the trade war he himself launched last year with a scattershot tariff regime. Ahead of the meeting, negotiators from both countries will seek to make progress on concrete agreements during talks in Seoul, South Korea.

Trump to bring up Jimmy Lai during talks with Xi

If nothing else, Trump can rely on Communist-ruled China for pomp and praise. After all, Beijing does not want to embarrass its own president — who has been firmly in power for 13 years — by failing to deliver on ceremony.

Trump also told reporters he would speak to Xi about releasing Hong Kong media mogul and prominent pro-democracy figure Jimmy Lai, who was sentenced to 20 years in prison under a draconian national security law imposed by Beijing.

"Jimmy Lai — he caused lots of turmoil for China. He tried to do the right thing. He wasn't successful, went to jail, and people would like him out, and I'd like to see him out too," Trump said on Monday

Will Trump keep the status-quo for Taiwan?

In Beijing's view, the question of Taiwan's legal status is a red line that must not be crossed in diplomatic relations with the United States.

Beijing regards Taiwan as a breakaway province of the "People's Republic of China (PRC)," founded by Mao Zedong in 1949. However, the democratically governed island still operates under the constitution of the "Republic of China (ROC)," which was founded in 1912.

According to Beijing's legal interpretation, "Taiwan" should not be used to refer to an independent country. They insist there is only one China and Taiwan is part of it, with the Beijing government being the sole legitimate government of China. Beijing refers to this concept as the "One-China Principle," which serves as the basis for all diplomatic relations with the PRC.

In the 1972 Shanghai Communique, which along with two other documents is considered the basis for the resumption of diplomatic relations between the US and the PRC, the US merely "acknowledges" the One-China principle.

Nevertheless, the Taiwan Relations Act, a US federal law enacted in 1979, authorizes the US government to "supply Taiwan with defensive arms" and to "counter any use of force or other forms of coercion that would endanger the security or the social or economic system of the people of Taiwan."

How Japan, South Korea and Taiwan hedge vs. US shifts

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Beijing recognizes that US President Trump has considerable leeway within this legal framework. It is therefore expected that Xi will try and persuade Trump to make a statement on Taiwan that is favorable to Beijing, which could include explicitly opposing Taiwanese "independence." A statement to this effect from a US president would have massive diplomatic implications. Washington's current official wording is that the US "does not support" Taiwan's independence.

Trump administration moves slowly on arms deals with Taiwan

Xi may also use promises of economic deals to pressure Trump over supplying weapons to Taiwan.

In December, Trump approved the largest-ever sale of weapons systems to Taiwan at $11.1 billion. Beijing bristled at the deal. It is worth noting, however, that the delivery of the weapons has not moved forward, and another $14 billion package is still waiting Trump's approval.

On May 8, after much political wrangling from Taiwan's opposition party, the Taiwanese parliament passed a law authorizing the purchase of $25 billion in military equipment, which was a far lower number that $40 billion put forth last year by Taiwan President Lai Ching-te.

Taiwan has been pressured by the Trump administration to increase its defense spending.

On Monday, when asked about US support for Taiwan's defense, Trump told reporters: "I'm going to have that discussion with President Xi."

"President Xi would like us not to, and I'll have that discussion. That's one of the many things I'll be talking about," he said. Trump added that he doubts a China-Taiwan conflict will ignite on his watch.

"I don't think it'll happen," he said. "I think we'll be fine. I have a very good relationship with President Xi. He knows I don't want that to happen."

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Can China help Trump with Iran?

With Trump facing a stalemate with Iran, Beijing could have some leverage to distract Trump from Taiwan in helping mediate in the conflict, said Peter Qiu, chairman and founder of the Center for Globalization think tank in Hong Kong.

"The US needs China's support in the Iran war," he told DW.

But Washington is not the only nation seeking diplomatic support in Beijing — last week, Iranian Foreign Minister Abbas Araghchi visited China.

Chinese Foreign Minister Wang Yi expressed concern that the war in Iran is undermining regional and global peace. At the same time, he said China supports Iran's peaceful use of nuclear energy for civilian purposes as the "right of every sovereign state."

Wang also expressed the hope that "all parties involved in the Iran conflict would respond positively to the international community's expectation that they ensure safe passage through the Strait of Hormuz."

The threat of Iranian strikes has kept the strait effectively closed since early March, cutting off the world from around 20% of the global oil supply. The US has responded with its own blockade on Iranian-aligned vessels.

US Secretary of State Marco Rubio said it was in China's interest "as an export-oriented economy" that Iran no longer block the strait.

"I hope the Chinese convey this message to Iran" Rubio said, he said last week at the White House.

However, Iran still ships oil to China. On Monday, the US government announced sanctions against people and companies based in Hong Kong, Oman and the UAE, for aiding the shipment of Iranian oil to China.

Could China be drawn into the Iran war?

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Time out on the trade war?

A year ago, as part of his global tariff blitz, Trump imposed heavy duties on Chinese products, calling out a the trade deficit between the world's two biggest economies. China responded by threatening to cut off supply of critical rare earth minerals. Trump backed off on some of the more extreme tariff threats, such as a 145% duty that he at one point threatened.

However, the state of play remains in limbo, and negotiators from both countries have not yet been able to announce any significant agreement.

Trump's message to the Chinese leadership is clear. The world shouldn't just buy Chinese products. China should also buy US products to offset the trade surplus.

"China is willing to buy US products," said analyst Qiu. "But China also wants to see something in return, such as the lifting of the export ban on specific US semiconductor products for artificial intelligence."

The US has implemented strict export controls on advanced AI chips needed to develop and deploy more advanced frontier models. China is trying to develop its own advanced chips, but is hampered somewhat by barriers from the US.

The last meeting between the two leaders last year in South Korea ended without any major breakthroughs, beyond promises to cut tariffs and meet again. Analyst Qiu said he expects this time will be different. 

"The bottom line is that I expect some kind of ‘big deal' involving the national interests of two major nations," said Qiu.

A new chapter in US-China rivalry

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This article was translated from German