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State visits usually take place when two countries are on relatively warm terms. But US President Donald Trump is hosting Chinese President Xi Jinping in Washington this week as economic and technological competition between the world’s two largest economies continues to intensify, particularly in the race for artificial intelligence.
Neither leader is expected to secure a grand bargain. Instead, Trump and Xi are expected to maintain a conciliatory tone during their third meeting since Trump returned to the White House, seeking to stabilise fragile bilateral ties despite fierce competition over AI and trade and their differing interests in persistent flashpoints such as Iran and Taiwan.
“The fact that they’re meeting, and there’s dialogue occurring and building that relationship, is probably as important as outcomes from the meeting,” said Senator Steve Daines, a Montana Republican who advises Trump on China and recently travelled to China to lay the groundwork for the summit.
Cui Tiankai, a former Chinese ambassador to the US, said at a recent forum in Beijing that there are “always problems, sometimes very big problems” between the two countries, but “we’ll make our best efforts to maintain overall stability.”
Trump and Xi shift away from sky-high tariffs, but competition remains intense
Xi’s visit to Washington, beginning Wednesday, will be his first in 10 years. He and Trump are meeting after the two countries stepped back from last year’s intense trade war, during which they imposed successive rounds of steep tariffs that threatened to disrupt the global economy.
China also restricted supplies of critical minerals in which it holds a dominant position and which are essential to products ranging from electric vehicles to fighter jets.
The US is seeking not only to rebalance trade but also to maintain its technological edge as part of its national security strategy and global leadership. China, meanwhile, has built significant economic, technological and military capabilities over the past several years, narrowing gaps with the US and seeking to consolidate its position in the global order.
The stability sought by both sides is “for deeply competitive reasons”, said Evan Medeiros, a senior adviser at The Asia Group consultancy.
“This is basically two geopolitical strongmen circling each other on the playground, trying to determine what their next move may be,” he said.
The countries appear to be entering a “new normal” of “overall stability”, despite blacklisting each other’s companies and restricting the flow of high-tech products, said Da Wei, director of the Center for International Security and Strategy at Tsinghua University in Beijing.
The leaders should now focus on producing agreements that their governments can implement, he said, adding: “We need to move fast.”
Artificial intelligence has emerged as a major battleground in the US-China rivalry, with neither side showing much interest in slowing its technological development despite warnings from technology executives about the potential dangers of advanced AI.
“Whoever wins AI wins,” Trump has repeatedly said.
He claimed on social media Monday that the US is leading China in AI and said he was “not going to stifle Growth, of something that will be bigger than the Industrial Revolution, or the Internet, itself.”
China also sees maintaining its AI capabilities as strategically important. In a rare and blunt essay, Chen Yixin, head of China’s Ministry of State Security, warned that AI could pose a direct threat to Communist Party rule if foreign and hostile forces achieve superior capabilities.
The US is already restricting exports of the most advanced AI chips to China and has accused Chinese developers of accessing American AI models on an industrial scale to extract their capabilities.
Beijing says such practices, known as distillation, are widely used, including by American companies, and has criticised Washington for seeking to monopolise the AI industry.
China is also opposed to US efforts to build an AI alliance that excludes Beijing. It has instead sought to promote new global rules for AI by appealing to developing countries.
However, Washington and Beijing are taking a limited step towards cooperation on AI.
Treasury Secretary Scott Bessent said Sunday, after meeting Chinese Vice Premier He Lifeng in New York, that the US had proposed a new “notification mechanism” for AI incidents that could affect national security.
“We think that just like any cross-border activity, that moving from opaque to more transparency between the No. 1 and the No. 2 AI powers in the world is very important,” Bessent said.
While the US and China have avoided broad punitive measures that could undermine their trade truce, they continue to target individual companies and specific products.
“What we’ve seen is kind of testing and probing by both sides to understand what can be done competitively, while still keeping that leader-level rapprochement on track,” said Mira Rapp-Hooper, a visiting fellow at the Brookings Institution’s Center for Asia Policy Studies.
The US has recently targeted Chinese telecommunications and surveillance equipment, companies accused of using forced labour in Xinjiang, as well as China’s advanced robots and drones.
The Pentagon has also barred Alibaba, BYD, Baidu and other major Chinese businesses from receiving US defence contracts.
Beijing has responded with export controls on drones and related technologies and blacklisted six US companies over their support for punitive measures linked to Xinjiang.
After the Supreme Court struck down Trump’s tariffs on trade partners this year, the administration has sought to impose tariffs through other means.
The White House in July introduced a 12.5 percent tariff on imports from 60 trading partners, including China, ostensibly for failing to do enough to prevent the import of goods produced using forced labour.
The US is also planning an additional 7.5 percent tariff on Chinese goods, accusing China of producing far more goods than it can reasonably consume.
Analysts say current tariff levels are acceptable to both sides, but any significant increase could rekindle tensions.
The Trump administration has also launched a campaign to isolate Iran from its remaining economic partners, while Beijing has insisted on its right to trade with Tehran.
So far, the Trump administration has done little to punish China over its economic ties with Iran, partly to avoid jeopardising the leaders’ summit.
But Washington is also losing leverage because China — Iran’s biggest oil buyer and its largest trading partner — has been developing ways to make payments outside the US-led financial system, said Alicia Garcia Herrero, an Asia-Pacific economist at French investment bank Natixis.
Taiwan, a self-governing island claimed by Beijing as part of China, remains one of the most contentious issues in US-China relations.
Trump paused a large weapons package for Taiwan following his May trip to Beijing, but the US is obligated under domestic law to provide Taiwan with sufficient hardware and technology for self-defence.
Analysts say Xi will most likely press Trump to further delay arms sales to Taiwan in an effort to raise doubts in Taiwan about Washington’s commitment.
