CHINA‘s Xi Jinping told President Donald Trump that trade talks were making progress at the start of a two-day summit on Thursday, but cautioned that disagreement over Taiwan could send relations down a dangerous path and even lead to conflict.
Xi’s remarks on Taiwan, the democratically governed island claimed by Beijing, came in a closed-door meeting of the leaders of the world’s two largest economies that ran more than two hours, China’s foreign ministry said.
They represented a stark – if not unprecedented – warning during a pomp-filled occasion that was otherwise friendly and relaxed, although the U.S. summary of the talks made no mention of Taiwan.
Instead it focused on the leaders’ shared desire to reopen the key waterway of the Strait of Hormuz, effectively closed due to the Iran war, and Xi’s apparent interest in buying American oil to reduce China’s dependence on Middle East supplies.
With Trump’s approval ratings dented by a war with Iran that shows no signs of abating, the first visit by a U.S. president to China in nearly a decade has taken on added significance as he searches for economic wins.
“There are those who say this may be the biggest summit ever,” Trump told Xi in brief opening remarks, after a ceremony that featured an honour guard and throngs of children waving flowers and flags at Beijing’s Great Hall of the People.
Xi told Trump that preparatory negotiations between U.S. and Chinese economic and trade teams in South Korea on Wednesday had reached “balanced and positive outcomes”, China’s foreign ministry said in a summary.
The talks aimed to maintain a fragile trade truce struck when the leaders last met in October, where Trump suspended triple-digit tariffs on Chinese goods and Xi backed away from choking global supplies of vital rare earths.
Treasury Secretary Scott Bessent, who led Wednesday’s talks, said he expected progress on establishing mechanisms to support future bilateral trade and investment, and an announcement about large Chinese orders for Boeing (BA.N), opens new tab aircraft.
China’s Red Lines
Trump expected Xi to raise the thorny issue of U.S. arms sales to Taiwan, he said earlier this week. With the status of a $14-billion package awaiting Trump’s approval still unclear, China has reiterated its strong opposition to the sales.
The U.S. is bound by law to provide Taiwan with the means to defend itself, despite a lack of formal diplomatic ties.
The Chinese leader told Trump that Taiwan was the most important issue they faced and if handled poorly could push the entire U.S.-China relationship into an extremely dangerous situation and cause the countries to collide or even enter conflict, according to Beijing’s summary of the talks.
Xi’s remarks were noteworthy, even though Beijing had issued strong warnings on Taiwan in the past, said Joe Mazur, geopolitics analyst at consultancy Trivium China.
“He’s warning the U.S. side in no uncertain terms not to screw around,” Mazur added.
Trump did not respond to a reporter’s shouted question whether the leaders had discussed Taiwan as he posed with Xi later for photos at the Temple of Heaven, a UNESCO World Heritage Site where emperors once prayed for good harvests.
Taipei said there was nothing surprising from the summit and that China’s military pressure is the real threat to peace.
Lobster Soup and Beijing Duck
At a lavish state banquet on Thursday evening attended by senior officials and business executives, Xi told the audience that the China-U.S. relationship was the most important in the world.
“We must make it work and never mess it up,” Xi said, before guests tucked into a 10-course dinner that included lobster soup, Beijing roast duck and tiramisu.
The leaders will take tea and lunch together on Friday before Trump departs.
Joining Trump on his visit are a group of CEOs looking to resolve issues with China, from Elon Musk, viewed in China as a visionary and occasional villain, to Nvidia (NVDA.O), opens new tab CEO Jensen Huang, a late addition to the delegation.
The United States has cleared around 10 Chinese firms to buy Nvidia’s powerful H200 AI chip, but not a single delivery has been made so far, Reuters exclusively reported.
Trump’s Weakened Hand
Trump entered the talks with a weakened hand.
U.S. courts have hemmed in his ability to levy tariffs at will on exports from China and other countries, while the Iran war has boosted inflation at home and escalated the risk that Trump’s Republican Party will lose control of one or both legislative branches in November’s midterm elections.
Though the Chinese economy has faltered, Xi does not face comparable economic or political pressure.
As well as Boeing jets, Washington is looking to sell farm goods and energy to China to cut a trade deficit that has long irked Trump. Beijing, for its part, wants U.S. curbs eased on exports of chipmaking equipment and advanced semiconductors, officials involved in the planning said.
Aside from trade, Trump is expected to encourage China to convince Iran to make a deal with Washington to end the conflict, as a fifth of global supplies of oil and natural gas travel through the Strait of Hormuz in normal times.
But analysts doubt Xi will be willing to push Tehran hard or end support for its military, given Iran’s value to Beijing as a strategic counterweight to the United States.
U.S. Secretary of State Marco Rubio told Fox News that it was in China’s interest to help resolve the crisis as many of its ships are stuck in the Gulf and a slowdown in the global economy would hurt Chinese exporters.
Trump on Thursday invited Xi for a reciprocal trip to the White House on September 24, the first since Trump began his second term last year. (Reuters)
