2026 Trump-Xi Summit in Washington: Drawing Substance from Symbolism

October 2026

Exactly seven years ago, as Beijing prepared to mark the 70^th anniversary of the People’s Republic, President Donald Trump took to Twitter to fire another rhetorical salvo in an escalating war of words. “We are winning, and we will win. They should not have broken the deal we had with them. Happy Birthday China!”

The trade war had been simmering for over a year, and the ‘Phase One Deal’ was not yet on the horizon. The defiant tweet was entirely in-keeping with the American president’s characteristic bravado, but it was also a sign of the times. Trump’s first term had prompted a fundamental re-think of the US-China economic relationship; America had upset the apple cart of international trade, and the Chinese side had been caught off-guard.

Fast forward to today, and there’s little doubt we are living in a different paradigm. After a global pandemic and two changes of administration in Washington, the world’s most important relationship now appears to have reached a ‘strategic stalemate’ – with the power differential having narrowed significantly in China’s favour.

This recalibration was palpably evident during last week’s US-China summit in Washington. Though modest in its outcomes, the optics and symbolism of the summit spoke volumes, all the way down to President Trump’s decision to greet his Chinese counterpart on the tarmac at Andrews Air Force Base – an honour that, with the exception of visiting popes, no other head of state had been afforded since 1962. The signalling was clear; this was a meeting of equals on the global stage.

Busan and Beijing, revisited

It’s easy to forget that, just one year ago, the two countries had come dangerously close to a total rupture in trade. In the months after ‘Liberation Day’, each side had ratcheted up to three-digit tariffs rates on the other, before agreeing to freeze and roll back at the leaders’ summit in South Korea last October.

The question of what would happen to the Busan agreement had been a topic of speculation ahead of the Washington summit. Reports suggested the Chinese had wanted to keep the truce in place until the end of Trump’s term in office, while the US side were considering a more modest extension. In the end, the negotiators settled on two months, leaving the US with some cards to play in future talks, which will likely see more pressure on China to concede on rare earth exports.

Rare earth licensing has been a point of contention even since the Busan truce, with the US side repeatedly questioning China’s commitments to implementation. While the Busan framework unwound the tit-for-tat escalations that culminated last autumn, it’s telling that, even now, China’s first batch of export controls from April 2025 remains in place.

Nonetheless, even a modest extension is a win for both sides. China’s sweeping export control package last October was a direct response to the BIS Affiliates Rule, which had significantly expanded the scope of US export controls on Chinese companies. Had the Busan ceasefire been allowed to expire on 10 November, the BIS rule – frozen for a year – would have snapped back into place, opening the door for another round of Chinese retaliation.

A tale of two boards

The latest summit was also the time to “operationalize” earlier commitments. In Beijing, the two leaders had agreed to set up a ‘Board of Trade’ and a ‘Board of Investment’, though so far only the former has seen tangible progress. Days before the Washington summit, US Treasury Secretary Scott Bessent met with Vice Premier He Lifeng in New York, paving the way for an agreement on $30 billion in reciprocal tariff reductions. For now, this only applies to “non-sensitive” goods, namely Chinese consumer products and American medical devices and agricultural goods.

As the economic backbone of America’s Midwestern heartland, agriculture has been a constant pain point throughout the trade war. Perhaps tellingly, the White House’s fact sheet from the summit explicitly name-checked the creation of a working group for agriculture – a detail later confirmed on the Chinese side by MOFCOM, but conspicuously omitted from the highest-level readouts by the State Council and MFA. 

While the Board of Trade is a promising development, the “sensitivity” consideration puts an inevitable ceiling on any serious long-term effort to redress the trade imbalance. The latest figures on America’s trade in goods with China recorded a $91 billion deficit for the first six months of 2026 – a gap that’s not likely to be filled anytime soon by soybeans and Boeing jets alone. But so far, advanced semiconductors are not on the table.

Then there’s the question of Chinese investment – perhaps even more politically sensitive than trade. So far, the Board of Investment remains a nebulous prospect. Both sides acknowledge that it should be a bilateral intergovernmental forum, but no substantive details have yet been revealed. Several questions remain unanswered, namely which sectors would be deemed acceptable targets of investment by both sides.

The elephant in the room is advanced manufacturing, especially electric vehicles. President Trump has already suggested he would welcome Chinese investment in the auto sector, so long as the factories are built stateside and create new jobs for American workers. But this sentiment is not held universally. Most US auto majors have recoiled at the prospect of opening up to Chinese EV companies and have backed the bipartisan Connected Vehicle Security Act of 2026, which was actively being pushed on the Senate floor the very day that Trump and Xi were meeting in Washington.

The question of AI

A constant throughline in public discourse the world over, artificial intelligence is one area where even limited consensus between the US and China could be significant. Still, there are genuine questions over alignment. Recent headlines have focused on Trump’s ambitions for America to dominate the global AI race, and his unwillingness to bow to any calls for an AI slowdown.

For months after the Beijing summit, the two sides had struggled to kick-start a standalone AI dialogue; the breakthrough only came when Secretary Bessent and Vice Premier He met in New York. The two countries have now agreed to create a formal US–China ‘AI Dialogue’, open a bilateral communication channel to tackle serious AI incidents, and to continue talking, with the next meeting pencilled in for November.

The scope is undoubtedly limited. The current agreement looks more like a crisis-management framework than a comprehensive AI treaty, with no consensus on basic issues like AI safety or model testing. The two sides remain strategic competitors in AI, and Trump’s post-summit comments offered no suggestion that the US intends to slow down or “integrate” its AI efforts with China. More substantive signals are expected when talks resume next month, most likely on the sidelines of the APEC summit in Shenzhen.

From Shenzhen to Miami

The significance of a potential Shenzhen summit goes well beyond the AI dialogue. As things stand, President Trump has agreed to fly to China’s southern tech capital for APEC next month, while President Xi plans on being back in the US for G20 Miami in December. This is unprecedented; if the meetings go ahead as planned, it will mark the first time that American and Chinese heads of state have visited each other’s countries twice in one year. With the highly personalistic style of leadership that both men embody, a strong rapport and regular facetime is surely a welcome guardrail in managing the complex relationship – even as the fundamental trajectory of great power competition remains unchanged.

The outcomes from Washington may have only marked an incremental step, with the possibility of relapse into a full-blown trade war never entirely out of sight. Much ink has been spilled in international press over the lack of tangible results from the summit, despite all the pomp and ceremony.

But style also creates its own substance. In a political culture that values symbolism and protocol, the grand welcome Xi Jinping received in Washington would not have been lost on domestic audiences in Beijing – especially as China’s Politburo prepares for its Fifth Plenum later this month and looks ahead to next year’s all-important 21^st Party Congress.

Seven years since Donald Trump’s bombastic tweet, America’s foreign policy attention has become mired in another Middle Eastern quagmire, while China is successfully positioning itself as the champion of the Global South – most recently epitomised through Xi’s flurry of diplomacy in India, Egypt, and Kyrgyzstan. This week, as China once again celebrates National Day, President Xi can feel confident that the balance of power between Washington and Beijing has shifted towards a more even keel.