Presidents Donald Trump and Xi Jinping held their much-anticipated summit in Beijing, but without any breakthrough on the big issues—trade and the Iran war, for example. There were no major business deals either, despite several top billionaire US executives accompanying their president.
Trump lavished praise on Xi as a “great leader” and was clearly looking for more from the summit.
“I think in terms of optics and rhetoric, Xi came across as stronger,” says Ja Ian Chong, professor at the National University of Singapore.
“While the Chinese president displayed the grandeur and might of his nation, Trump looked like he was pleading, needing something from Xi, with all of the unrequited praise.”
This is very different from Trump’s first term, when he was the one making the demands and applying the pressure. What happened?
As I wrote earlier this year, after the tariffs and technology restrictions of the first Trump administration, the Chinese president laid out his vision in April 2020 to senior Party officials for turning the tables on the United States. Xi said Chinese leaders must “tighten the dependence on our country by international production chains, thereby forming a powerful capacity to counter and deter foreign parties from artificially disrupting supplies” to China.
Then came COVID. Global trade ground to a halt and exposed how much America and the world depended on China for everything “from surgical masks to pain medicines”. Xi saw the opportunity for his long-conceived plan to make the world dependent on China’s exports and expertise.
In the five years after 2020, he ensured China became the unassailable “workshop of the world”. China’s central bank lent nearly US$2 trillion to industrial borrowers over four years for manufacturing “everything the world needs” and dominating supply of these products “to make China’s adversaries think twice about using tariffs or trying to cut China off”.
When Trump, in his second term, came with his mass tariffs of 145 per cent on Chinese goods, Beijing was ready. It immediately hit back with import duties on American goods of 125 per cent, bringing trade between the global giants to a virtual standstill.
Markets plummeted, and companies rerouted imports through countries like Vietnam and Mexico.
Indeed, after Trump’s tariffs plunged China’s shipments to the US by 21 per cent, China fed its export machine by increasing exports to Southeast Asian countries by the same percentage.
The tariffs became unbearable for US businesses. At trade talks in Geneva, Trump reduced his 145 per cent tax on Chinese imports to 30 per cent. Reciprocating, China lowered its import duty on American goods to ten per cent from 125 per cent.
“An almost complete US retreat,” said China expert Scott Kennedy.
Most critically, Beijing placed restrictions on exports of a wide range of critical minerals and magnets over which it had established almost global control—minerals essential for assembling everything from cars and drones to robots and missiles.
This tipped the balance. It “made the world reliant on China, and China reliant on no one,” says Kirsten Asdal, former US intelligence adviser.
“Now, China handles the US more by deterrence than concessions. It makes concessions only in exchange for US concessions, and has proved willing and able to meet escalation with escalation,” says China expert Andrew Gilholm.
Is it any surprise the summit was subdued? Gone were the bluster and hawkishness. Emollient tones replaced fractious exchanges between the world’s two great powers, whose relations appear stabilised. This is welcome news for a global economy facing increasing uncertainty from the war on Iran, particularly the closure of the Strait of Hormuz.
But behind all the smoothness and harmony, there is another reality. The Chinese now see America as an “empire in decline”. Previously, they viewed the US with a mix of admiration, envy and resentment. But President Trump’s “volatile second term shattered that image,” writes Li Yuan in The New York Times.
Indeed, a January report from a nationalistic Beijing think-tank says Trump’s tariffs, attacks on allies, anti-immigration policies and assaults on the American political establishment “have weakened the United States”.
The report describes Trump as an “accelerator of American political decay” and concludes that “at this turning point in history, what we hear is the heavy and haunting toll of an empire’s evening bell.”
Xi Jinping firmly believes US power is waning. When, during the summit, he asked Trump, “Can China and the United States overcome the Thucydides Trap?”, he was referring to the historical inevitability of conflict between a rising power and the incumbent hegemon—Athens and Sparta in the 5th Century BC.
Analysts saw the calm, self-assured Xi, confident of his nation’s coming rise to pre-eminence, asking a loaded question of the President of the United States—the declining hegemon, now “unpredictable, undependable and distrusted by both friends and rivals”.
Critical questions arise. Is the Chinese leader accurate, or is he blinded by the hubris that comes from entrenched authoritarian control?
Secondly, will the United States, as democracies often do, find renewal in its people, now deeply dissatisfied with their country’s present trajectory?
Will the great American nation overcome its current difficulties and scale even greater heights?
These are critical questions for all humanity arising from the recent US-China summit.
