There is much to be said on many issues between the U.S. and China, and it was — in the many meetings that occurred between American and Chinese officials that took place as the two countries’ leaders said very little during Xi Jinping’s three-day visit to counterpart Donald Trump last week. However, having tapped several U.S. and European Union (EU) sources that were very close to the proceedings, OilPrice.com has put together the key points really thrashed out between the two sets of negotiation teams while Trump and Xi strolled around the White House’s Rose Garden. So, what was said, and why?

In broad terms of Trump’s approach to the Summit, his team remains cognisant of the widespread criticism that he faced in his first-term dealings with China, and in the catastrophic early second-term approach. In his first term, Trump was repeatedly cited for ‘giving up security considerations for trade’, even by his own National Security Adviser, John Bolton, as analysed in full in my latest book on the new global oil market order. An early notable case in point had been the almost complete reversal of hard-hitting U.S. sanctions imposed on Chinese telecommunications company ZTE for committing major and repeated violations of the U.S.’s sanctions on Iran and on North Korea. More specifically, according to Bolton, after a private telephone call to President Xi — in which it later transpired that Xi told Trump that he would ‘owe [Trump] a favour’ if he reduced the sanctions against ZTE — Trump did precisely what Xi had asked for: thereby, selling security considerations for trade. Trump tweeted at that time: “President Xi of China and I are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!” As Bolton wrote: “Since when had we started to worry about jobs in China?” Related: Three EU Nations Call for New 2040 Renewable Energy Goal

Conversely, perhaps as a response to such criticism, Trump’s second term had been marked by the imposition by mid-April of extraordinary 125-145% tariffs on China in an attempt to redress the trade balance between the two countries — a long-running bone of contention between the two sides. However, this ultra-aggressive approach resulted in China responding in kind with similarly huge tariffs on the U.S. and the effective weaponisation of its huge, rare earth elements lever over Washington through the imposition of strict export controls on seven of these metals, oxides, and heavy rare-earth magnets that are most vital to U.S. defence, electronics, and automotive supply chains. Beijing expanded the restrictions to five more elements and enacted a total ban on the export of gallium, germanium, and antimony to the U.S. China then introduced a rule requiring a government export license for any third-country factory (including in Europe or Japan) exporting goods that contained even a 0.1% trace amount of Chinese-origin rare earths or utilised Chinese rare earth technology. The result of these actions by both sides was a supply chain paralysis which ultimately led to a trade truce between Washington and Beijing to run until November.

Extending this truce was among the first points of action in last week’s Trump-Xi Summit, albeit only for two months, to 10 January 2027. U.S. Treasury Secretary Scott Bessent said the extension would give Washington and Beijing “more time to see what we can do on the economic front.” He added that although Beijing was meeting its requirement in the earlier agreement to buy 25 million tons of soybeans, it was lagging on its pledge to buy US$17 billion in other agricultural goods. Meanwhile, a senior Washington-based source working closely with the U.S. Treasury exclusively told OilPrice.com last week that rare-earth deliveries from China also continue to fall short of what was promised, which is a key reason why the trade truce was only two months rather than the three- to six-months that U.S. Trade Representative Jamieson Greer had hinted at days earlier. “They’re around 25% lower than the average volume that we saw before the export controls were announced in March, despite volumes to several other countries having increased a lot in some cases,” the source said. More specifically, volumes to the EU have increased around 21%, to South Korea by 23% and to India by 44%. Additionally, said the source, the promised purchases of U.S. aircraft by China also leave a lot to be desired, with the 500 orders that American manufacturers had been angling for downgraded to 200 big planes, and no further details on the size and types of aircraft or delivery schedules forthcoming.

In an interesting potential indication of which side thinks it has most to lose on trade — especially factoring in the rare earth elements advantage Beijing has over Washington — Trump and his team were extremely careful not to unsettle the uneasy truce on the future of Taiwan either. No mention from Trump, or from his team in any of the multiple other meetings that occurred last week, was made of the U.S. starting deliveries from the US$11 billion arms package agreed for Taiwan in December, approved at that time by Trump. However, on the Chinese side, there were two versions of its position — the official one and the unofficial one. Officially, Xi said that he hoped the U.S. would “handle the Taiwan question with prudence”. Unofficially, according to a senior source at the EU’s energy security complex exclusively spoken to by OilPrice.com last week, China continues to push for Washington to not only refrain from making good on any arms deliveries to Taiwan but also to oppose Taiwan independence. Currently, the official U.S. stance is that it does not ‘support’ independence, which is part of the same ‘One China’ policy that Washington has held for the last three decades.

The penultimate of the two remaining key issues covered by the U.S. and China last week — the Iran War — also yielded no particular joy for Washington. Despite remaining by far the biggest buyer of Iran’s oil during the conflict, as it has been for years, and exerting enormous control over the Islamic Republic and its proxies, including the Houthis, through the all-encompassing ‘Iran-China 25-Year Comprehensive Cooperation Agreement’, as first revealed anywhere in the world in my 3 September 2019 article and analysed in full in my latest book on the new global oil market order, Beijing continues to decline requests from Washington to place more pressure on Tehran to agree to a peace deal by threatening to halt oil imports. It also continues to deny that it is actively helping Iran in its war effort against the U.S., despite a recent surge in military and dual-use hardware and software that Beijing is sending to Tehran, as analysed recently by OilPrice.com. Instead, Xi said that he supported the U.S. and Iran returning to the interim agreement that was supposed to pave the way for a larger peace deal that was announced in June, and examined in full by OilPrice.com. “It was SSDD [same s**t, different day] all round on Iran, so we’ll be doing the same too [regarding China],” highlighted the Washington source. The same from the U.S. side would involve increasing the targeted sanctions seen in recent months on Beijing, while a senior energy sector source who works closely with Iran’s Petroleum Ministry exclusively told OilPrice.com last week that Tehran expects a full resumption of U.S. military hostilities after the country’s Mid-Term elections have finished on 3 November. “The Guards [Islamic Revolutionary Guard Corps] don’t think that Trump will agree before the elections to any deal anything like the deal they demanded back in June, so there’s no point in getting serious new talks going now,” he said.

On the final subject under review — the future of artificial intelligence (AI) — both presidents seemed confident enough in their own country’s offerings not to sign any major pact to slow down their ongoing AI arms race. Trump stated that he opposes global frameworks or heavy-handed regulations that would restrict AI development. He added on Truth Social that he wants to “leave it exactly where it is”, insisting the U.S. must outpace China through rapid innovation rather than slowing down. Meanwhile, Xi acknowledged that both nations are leading the global domain, stating it should be a healthy “race of catching up with one another, not a wrestle”. He added that while competition is inevitable, both major countries must find a way to “coexist in peace” to avoid catastrophic cross-border AI incidents. As thoroughly laid out by OilPrice.com recently, Xi has every reason for his quiet confidence as — given the structural disadvantage the U.S. has in providing the power required for its AI firms to scale up their revenues to avoid multiple bankruptcies — it looks highly likely that China will win the AI race overall over the long term.

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