China’s President Xi Jinping, ruler for life, is not ready to make sweeping deals with the USA on soybeans, AI or anything else. This was a State Visit, not a summit, but even so, deliverables were light. China’s state-owned People’s Daily was so strapped for material that they ran a story titled: “Bonded by Ping-Pong: China-U.S. friendship writes a new chapter.”
But don’t lose heart. The Trump Administration has scored some quiet wins and much better field position for the long haul. “The old adage of deliverables in a relationship that we have with China is really not measurable in many ways,” said U.S. Ambassador to China David Perdue. It’s about “continuing the conversation.”
What matters most to America in the long term is the trade deficit. Good news: it’s falling. Already the gap between U.S. exports and imports from China is down from $297 billion in 2024 to $202 billion in 2025, and U.S. Trade Representative Jamieson Greer says the deficit is on track to drop to $140 billion for 2026. If achieved, this is a historic reversal of globalization. The gap hasn’t been this low in over 20 years.
TRUMP-XI REUNION COMES WITH UNFINISHED BUSINESS — AND A BIGGER BATTLE LOOMING
Credit what Team Trump calls “managed” trade: specific, non-sensitive goods, such as agricultural products and medical devices. “All those export controls that are national security issues, we take those off the table,” Greer told CNBC. Greer promised more trade details next week. However, China has bought only half the amount of soybeans agreed, according to American Soybean Association President Scott Metzger, so there’s still a ways to go on the trade balance.
This is not glamorous work. Secretary of the Treasury Scott Bessent held a 12-hour meeting on Sunday with Chinese Vice Premier He Lifeng. In the end, all the two sides could do was extend the 2025 truce for two more months. You remember what happened last year: China stopped licensing rare earth material exports, and Trump slapped on massive tariffs. “I don’t know whether a bigger deal can be done. I don’t know whether we will just roll the current deal,” Bessent said Wednesday.
The Bessent-He meeting was also supposed to tee up some kind of agreement on an artificial intelligence safety mechanism for Trump and Xi. Afterwards, Bessent kept to the optimistic line that China was eager to engage, and spoke about at least setting up a hot line to deal with incidents across borders. Don’t count on much more. China does not participate in nuclear arms control. Any AI accord will be all talk with no teeth, just like the U.S.-China fentanyl working group.
AMERICA AND CHINA ARE FIGHTING FOR THE FUTURE OF AI — CHIPS ARE THE BATTLEFIELD
What’s much more important is keeping the U.S. AI tech stack ahead of China. At the White House State Dinner on Thursday night, it was good to see Trump assemble the tech titans as he did on his visit to Beijing in May. These leaders from Nvidia, Apple, Microsoft, Google, Dell, OpenAI, Citigroup, etc. have the cash and the smarts to keep the U.S. in the lead in AI. SpaceX and Amazon Leo are launching satellites that will keep U.S. dominance over China in the low earth orbit market sector. Google has Project Suncatcher to try running its tensor processing units with solar power on orbit. Innovation is America’s edge over China. Yes, they’d like to book deals with China in areas such as chips and financial services, but China has been lagging. For example, Nvidia is cleared to sell its H200 chips to China (not its most advanced products) but only small batches of chips have been purchased by Tencent and ByteDance. The reality is that China is cutting imports under Xi’s policy of semi-conductor self-reliance. That’s a sign that China is girding for long-term conflict.
Fortunately, President Trump has taken many actions to strengthen America’s position. The Greenland agreement, investing in Venezuela’s oil, getting Chinese operators out of the Panama Canal Zone, a hefty defense budget aimed at countering China, expanding the Space Force, and yes, the U.S. Navy blockade of the Strait of Hormuz: all this has protected American interests. Boundaries are good for geopolitics.
CHINA IS TAKING THE FIGHT TO THE STARS. AMERICA MUST RECLAIM SPACE SUPREMACY
And what did Xi contribute? Xi Jinping announced China’s welcome loan of two pandas to the Atlanta Zoo, and a preposterous initiative for 100,000 Americans to study in China over the next five years. This, from a China ramping up nuclear weapons production, hassling U.S. satellites on orbit, backing Russia with oil purchases and defense electronics, and giving what Perdue termed “intel and parts” to Iran.
That offer was deeply cynical. Xi wants to show off Chinese culture, but in fact, there are fewer than 2,000 American students in China compared to 265,919 Chinese students in the USA. Last fall, Harvard enrolled 1,452 students from China, mostly graduate students. But if you want to go, Duke University has a joint venture in China which got a flattering and no doubt coincidental write-up in the state-owned China Daily on Friday.
