The long-awaited Beijing Summit (previously postponed due to the Iranian conflict) between President Trump and China’s Xi Jinping starts tomorrow and continues through Friday.
There has been considerable speculation regarding the outcome, with many claiming that Trump is playing a weak hand. That is not necessarily the case.
Although China has escalated the roll-out of renewable energy it is still highly reliant on fossil fuels and especially those flowing through the Strait of Hormuz. The US is a net oil exporter and in 2026 it has flexed its control of the production, and shipping, of oil through capturing Venezuela’s leader Nicolás Maduro, starting a war with Iran and now blockading Iranian ports.
China, meanwhile, has kept quite calm about US tariffs and flexed its own geopolitical muscle by threatening an embargo on the export of rare earths, which are critical in key US industries, such as defence and transport, and in which China dominates supply.
Both countries have cause to find agreement as to how they will deal with each other going forward. Such agreement can be mutually beneficial (a good start to any negotiation) and there are likely to be some easy wins. For example, Xi Jinping has said “China should have a powerful currency” whilst Donald Trump has said “you make a hell of a lot more money with a weaker dollar – not a weak dollar, but a weaker dollar – than you do with a strong dollar”. Allowing for China’s currency, the Yuan, to rise against the dollar is an outcome both men can agree on.
Trump and Xi will also be keen to find a lasting solution in the Strait of Hormuz and China is almost certainly applying pressure on the Iranian regime to accept a deal. Don’t hold your breath, but it’s possible that the Beijing Summit could conclude with an outbreak of peace in the Middle East.
Other items up for discussion are likely to include access to America’s semi-conductors and high-tech AI platforms, although this is unlikely to be a dealbreaker as China is pivoting towards economic efficiencies through the use of AI, rather than taking on America in the race for AGI.
Disputes over Taiwan can easily be resolved by America paying lip service to a “One China Policy”, and China is likely to offer to invest in US manufacturing, much like the Japanese & Americans did in the UK in the ‘70s and ‘80s.
The world’s two biggest powers may not like to admit it, but to generate the economic growth that the two countries desire, they really do need each other. This is why I think the most likely outcome of the Summit will be some form of accord with some highly publicised “breakthroughs”.
In short, with geopolitical tensions rife, the last thing the world needs is a deterioration in the relationship between its two superpowers. With this in mind, the Summit will be carefully choreographed but it is also likely to produce some genuinely positive outcomes. We will keep you posted!
