Hopes dim for US-China détente during leaders’ summit

As US President Donald Trump prepares to host Chinese President Xi Jinping at the White House for a high-stakes summit on September 24, the state of the US-China trade relationship comes under scrutiny. The fragile truce agreed upon last October has successfully curbed the escalating tariff battle initiated by Trump, yet a comprehensive, lasting trade agreement remains elusive.

Although tariffs have significantly decreased since April 2025, a complex network of sector-specific levies persists. In July, the effective tariff rate on Chinese imports stood at 22.8%, the highest among major US trading partners. China maintains a 10% tariff on all US goods, with additional duties varying by sector. Despite ongoing trade, China continues to enjoy a substantial trade surplus, accounting for 75% of total bilateral transactions.

The summit will focus on discussing tariff reduction frameworks, addressing the $30 billion in products targeted for negotiation, and establishing trade and investment councils to manage economic friction. China's leverage lies in its control over critical minerals, such as rare earths, which are essential for high-tech industries.

The Trump administration aims to alleviate economic concerns ahead of the November midterm elections, with a particular focus on securing Chinese commitments to purchase more American agricultural products, particularly soybeans. However, potential obstacles include China's economic and diplomatic support for Iran, as well as technology competition, particularly in the realm of artificial intelligence.