Trump-Xi Summit: A Significant Chinese Advantage
In the wake of the Trump-Xi summit in South Korea, it’s hard not to recall the words of the Chinese military strategist Sun Tzu: “If you know the enemy and know yourself, you need not fear the result of a hundred battles.” This principle seems particularly relevant when assessing the outcomes of the meeting between former U.S. President Donald Trump and Chinese President Xi Jinping.
A Strategic Miscalculation
When Trump initiated his trade war in April, he appeared to lack a thorough understanding of both American and Chinese strengths. In essence, he didn’t know his enemy or himself. Consequently, the South Korea summit saw a return to square one, perhaps even a step backward.
China’s Strategic Wins
Trump announced that China would immediately begin purchasing American soybeans, and Xi would make an effort to stop the trade of fentanyl. The former president also declared that tariffs on China would decrease from 57% to 47%. Additionally, tariffs on Chinese ships docking at American ports would be suspended, along with Chinese restrictions on rare earth metals announced earlier this month. However, it was unclear whether China would suspend restrictions imposed last spring in response to Trump’s tariffs, or only those recently imposed.
In contrast, China will continue to work with Nvidia and other companies to obtain the chips it needs, according to Trump. Yet, uncertainty surrounds the type of chips China may acquire, which might not be the most advanced. Trump mentioned that he refused to allow Nvidia to sell Blackwell chips associated with artificial intelligence. However, he discussed the possibility of accessing other chips, adding, “I said this is between you (the Chinese) and Nvidia, but we are, to a certain extent, the arbiter.”
In August, Reuters reported that Trump had opened the door to the possibility of selling advanced chips from Nvidia to China. The report added that the company was developing AI-related chips specifically for China based on the Blackwell model.
Currently, the initial agreement appears to have included the suspension of U.S. restrictions on Chinese companies on the blacklist, which were supposed to include branches that own at least 50% of the shares. U.S. Treasury Secretary Scott Bessent announced that China agreed to transfer ownership of the short video app TikTok.
Thus, China has achieved clear gains by avoiding additional restrictions on chips, if not by lifting some of them. America will get a year-long easing of restrictions on rare earth metals, with the possibility of extension. The difference between the gains of the two parties is that Washington needs a long period to become self-reliant in mining and refining critical metals. Meanwhile, China’s access to chips may enable it to achieve technological breakthroughs in a short period, depending on the type of chips it obtains.
A More Complex Issue
As soon as China imposed additional controls on rare earth metal exports earlier this month, Trump retreated within days from the threat of imposing 100% tariffs on Beijing. China discovered that the American vulnerability was greater than expected. This means that China can exploit its influence in pivotal metals to pressure other sensitive points, such as Taiwan.
Therefore, did Trump concede to Xi on this file? It is a strong possibility, especially since Washington has a recent record in this framework, which is not limited to freezing a package of military aid to the island. Even if this concession did not happen in Busan, it may be achieved in the not-too-distant future, before the two presidents meet again next April.
The Opium of the Soul
Trump is not responsible for Washington’s decades-long abandonment of its investment in critical metals, but he is responsible for not reading this reality before launching the trade war. Consequently, he is responsible for not preparing the United States to regain its ability to compete, which is possible. It helps that the Chinese economy is not in its best condition.
Trump is paying the price for prioritizing the spotlight over substance and trade deals over strategic competition. China realizes this and has obtained significant gains in exchange for some minor concessions. Even issues of central weight for the United States, such as superior Chinese manufacturing, remain unresolved. For example, China’s purchase of soybeans helps American farmers who vote for Trump. The issue of transferring TikTok ownership is another secondary Chinese concession, as Xi considers this application the opium of the soul. In a nod to Trump’s feelings, Xi said that China’s development does not contradict the spirit of America First.
During the handshake, Trump showered praise on the Chinese president. But Xi remained silent at this time. Perhaps he was thinking about how to capitalize on his victory in the future or how to dictate his next steps as the trade war resumes. The dictation is an expression of Fox News, the media network allied with Trump.
Source: Annahar
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