The upcoming Trump-Xi summit is fraught with uncertainty, strained by the US conflict with Iran and China's unprecedented defiance of US sanctions on its oil refiners.
Leverage in the US-China relationship has shifted, with China successfully using its control over critical minerals (rare earths) to pressure Washington, impacting an estimated 4% of US GDP.
While the US maintains a strategic advantage in advanced AI, creating a new area of leverage, the overall relationship is managed through low-ambition 'deliverables' like Boeing and soybean purchases.
Both leaders face significant domestic political pressures, which incentivizes them to maintain a stable, albeit tense, relationship to avoid further economic disruption.
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Concerns Raised
China's increasing willingness to defy US sanctions, potentially targeting major banks and escalating financial conflict.
The potential for China to re-weaponize its control over critical minerals and rare earths, disrupting significant portions of the US economy.
The risk of the Trump-Xi summit being cancelled, which could trigger a new round of trade escalations.
Internal political turbulence in China, such as Xi's purges of top generals, could lead to unpredictable foreign policy decisions.
Opportunities Identified
Maintaining a stable, albeit competitive, relationship through high-level diplomacy.
Securing specific commercial deals, such as for Boeing aircraft and US soybeans, which serve as manageable 'wins' for both sides.
Potential for establishing guardrails on emerging technologies like AI to prevent misuse by rogue actors.