Trump, Xi, and the Tensions of “Managed Stability”

The balance of power has its eccentricities. Donald Trump personally received Chinese President Xi Jinping at Joint Base Andrews with a curious display of welcome: on the tarmac, he rolled out a lavish 30-meter red carpet to the door of Air China.

In politics, as in other spheres, symbolism matters. The Chinese appreciated the gesture of respect and did not seem bothered by the low-altitude flyovers of B-2 Spirit bombers alongside F-16 and F-22 fighters.

The last time a U.S. president received a head of state in this manner was in 1962, when John F. Kennedy welcomed Harold Macmillan, Prime Minister of the United Kingdom. On that occasion, it was a polite ally. This time, the fanfare served America’s chief rival in a capitalist world roiled by “polycrisis.”

“Since my first election in 2016, President Xi and I have forged a friendship, a truly great friendship, which is actually based on mutual respect and the vital interests of our people,” Trump said. Xi was more incisive, stating that Chinese and American interests are “deeply intertwined” and that “competition must be healthy and remain within limits.”

The meeting turned out to be a tortuous echo of the bilateral meetings in South Korea and Beijing. There was no major structural breakthrough; fundamental conflicts remained entirely unresolved. Neither Trump nor Xi has found a decisive leverage point that fundamentally alters the adversary’s system of balance. The summit’s main takeaway was mere “managed stability,” alongside erecting guardrails to prevent the rivalry from escalating into open conflict.

Unsurprisingly, China has shown no interest in heeding the Trump administration’s persistent calls to use its considerable influence to force Iran to accept American terms. On the other hand, Trump resisted calls from Beijing to end tariff escalations, agreeing only to extend a trade truce set to expire on November 10 by two months.

A glaring failure of Trump’s strategy is the tariff policy aimed at stopping the flood of Chinese products. Bilateral trade in goods and services between the countries dropped 25 percetn in 2025. However, China’s global exports have continued to surge. Solar panels, batteries, electric vehicles, minerals, and integrated circuits continue to enter the United States via third-party countries. This year, China is on track to surpass a record trade surplus of $1.19 trillion, and as Adam Posen writes in Foreign Affairs, although China has what the United States needs, the United States has failed to increase China’s dependence on American exports.

Rare earths have long been part of these tensions. China is the global hegemon in the rare earth elements sector, controlling 60 percent to 70 percent of mine production and over 90 percent of the world’s capacity for refining and permanent magnet manufacturing. These minerals must be processed before they can be turned into magnets and other materials used in manufacturing weapons, automobiles, computers, and a multitude of other products. All estimates point to a continued U.S. reliance on China into the 2030s. The ongoing need for imports highlights Trump’s fragile negotiating position relative to Xi, as well as the broader complexity of building a rare earth industry from scratch after the United States virtually abandoned the sector in the late 20th century.

It is from this perspective that Xi Jinping invokes the phrase “strategic stability” to describe relations between China and the United States. This expression is borrowed from nuclear weapons doctrine: the state of balance in which neither power has an incentive to launch a first strike, relying instead on mutual deterrence and predictability. In line with this, Xi insisted that both sides should try to avoid the “Thucydides Trap” — the theory that an emerging power and an established power are highly likely to go to war, much like Athens and Sparta in the Peloponnesian War. China often uses this concept alongside another: “great changes unseen in a century are accelerating,” words that describe its perception of Washington’s decline.

Technological competition is a prominent theme. In his speech before the United Nations General Assembly, Trump advocated for accelerating the development of Artificial Intelligence (which he faithfully renamed “superintelligence”) in the United States due to Chinese competition. “Right now, we are ahead of China, and everyone else, and we are going to keep it that way… Whoever wins superintelligence wins everything.” Technological leadership, in reality, is less clear and more diffuse. The many companies in the sector — OpenAI, Anthropic, Alphabet, Alibaba, Huawei, DeepSeek — rely on advanced microchips from Nvidia (without whose hardware infrastructure training extended language models would be non-viable), and on latest-generation manufacturing done in Taiwan, which through TSMC concentrates 90 percent of high-end semiconductor production. Furthermore, Trump’s speech comes days after the international scandal involving OpenAI’s artificial intelligence agent, which managed to escape the company’s isolated testing environment and hacked systems on Hugging Face, a platform that aggregates AI tools and models.

The dynamics of structural competition between China and the United States tend to push the race for supremacy in this area — inevitably linked to the extraction of surplus value and eco-destructive extractivism in mining and processing activities — to the extreme. Trump and Xi view the tech race as an existential challenge and, naturally, consider the best way to develop AI devices to be subordinating them to the capitalist interests of their respective powers. Xi Jinping stated that “AI must be under human control.” But it will not be under the control of the social forces that craft and direct it as long as it remains subject to the interests of Sino-American big capitalists. There is no doubt that technologies serve no other goals than those of their owners, who in the capitalist world deploy the most advanced machinery — embodying much of the general intellect — to promote wars and the super-exploitation of labor. Taking AI out of the hands of capitalists means attacking the social forces that Trump and Xi represent.

In May, Taiwan was the primary issue for China. Xi warned Trump that mishandling Taiwan could lead to “confrontations and even conflicts, putting the entire relationship at great risk,” according to the Chinese Ministry of Foreign Affairs. As the official newspaper Xinhua reported at the time, “‘Safeguarding peace and stability in the Strait is the highest common denominator between China and the United States,’ Xi said, emphasizing that ‘Taiwan independence’ and cross-Strait peace are as irreconcilable as fire and water.” This time was no different. Beijing has warned the United States to exercise extreme caution regarding the Taiwanese issue. Behind the scenes, Xi pressured Trump to halt arms sales to Taiwan based on the Six Assurances of 1982, which exempt Washington from consulting Beijing on military equipment trade with the island. In December 2025, Trump announced arms sales worth approximately $11.1 billion to Taiwan, including advanced rocket launchers, self-propelled howitzers, and a variety of missiles.

Latin America may not have been among the main topics, but it matters to both governments. Beijing has numerous vested interests in the Southern Cone, ranging from the extraction of critical minerals and the importation of agricultural inputs to the construction of rail-port infrastructure and control over power transmission networks. In Brazil, Chinese companies such as CMOC and Equinox Gold acquired large gold, iron, niobium, and phosphate operations in Goiás; in Chile, state-owned copper company Codelco has a partnership with China Minmetals, and Chinese firms like Tianqi Lithium hold 24 percent of SQM, one of the world’s largest lithium producers. In Peru, China Southern Power Grid controls all electricity distribution in the metropolitan area of Lima. In Argentina, China operates the Space Ground Station (Deep Space Station), a space tracking base located in the province of Neuquén, enhancing its ability to cover gaps in global space-tracking coverage.

Trump wants none of this, which is why he has promoted the Shield of the Americas as part of his national security strategy, seeking the recovery of the Western Hemisphere and the containment of Chinese influence. The theft of Venezuelan oil and mineral assets and their conversion into an American protectorate (with the active assistance of Delcy Rodríguez’s Chavism) has shaken Chinese business, leading to substantive disputes over which power can extract greater advantages from the Southern Cone. Interference in political-electoral processes, as occurred in Argentina with financial aid to Milei’s campaign, is one of Washington’s tactics — footprints that can also be detected in Brazil, currently governed under a policy open to multilateralism (despite diplomatic friendliness with Trump since 2023, Lula was forced into a more confrontational tone at the UN). Policies of this nature interfere with China’s structural interests in the region, suggesting that friction in this area will only increase.

So far, Trump has found no ways to exploit the weaknesses of China’s economic imbalance, which relies on productive overcapacity, market expansion, and the strengthening of an industrial-export system shaken since the collapse of Lehman Brothers. Trump bet that China’s economic slowdown — marked by a prolonged real estate crisis, local government debt, and weak domestic consumption — would leave Xi Jinping cornered and far more willing to compromise on comprehensive trade deals. The Biden policy of leveraging China’s dependence on exports and the U.S. market continued, pressuring Beijing to open its domestic market and limit state subsidies to industry. None of this has borne fruit, and it has also revealed to China the comparative advantages it holds.

It remains to be seen whether the Trump administration can reverse the upper hand gained by Beijing, an advantage further augmented by Trump’s defeat in the Middle East.

Originally published on September 25 in CRP Asia