With the leaders of the United States and China set to meet this week, experts say this is the best time for President Xi Jinping to negotiate. The US is busy with wars in the Middle East, and President Donald Trump’s approval rating is cratering at home: he is desperate for a win, which could give China the upper hand.
Trade between the world’s two largest economies has been disrupted since Trump returned to office last year and unleashed a series of tariffs on the world, imposing some of the highest rates on China, 145 percent at one point.
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Beijing retaliated with its own tariffs and halted the exports of rare earth metals, an essential component for a range of industries, including cars and smartphones, and which China has a monopoly in.
While things have eased slightly since the peak of that freeze, they are far from normal.
“Trade relations really, really deteriorated. US imports from China fell by more than 25 percent and exports to China fell by 25 percent or more. Those are huge numbers in one year,” said Chad Bown, the Reginald Jones senior fellow at the Peterson Institute of International Economics (PIIE).
“There doesn’t seem to be any floor to how bad the relationship is.”
By one estimate, US exports to China would have been nearly 60 percent higher in 2025, or roughly $90bn annually, without Trump’s trade wars, Bown says.
Even as US imports from China fell fell – down 4 percent in 2025 to 9 percent of imports – its imports from other countries rose 9 percent, as per PIIE’s Bown, as businesses adapted to the higher tariffs imposed on China to move their supply chains to other countries, including Mexico, Vietnam and Taiwan.
China’s trade surplus hit a high of nearly $1.2 trillion last year as it made up for reduced trade with the US by increasing business with other parts of the world, showing “it has moved away from its reliance on the US,” says Dexter Tiff Roberts, a nonresident senior fellow at the Global China Hub at the Atlantic Council.
Tensions between the two countries continued even after they met in late October in South Korea on the sidelines of the Asia Pacific Economic Cooperation summit, and have not eased much since.
“This is an important trip,” said Wei Liang, professor at Middlebury Institute of International Studies in Monterey. “Right now, it’s chaotic, and both sides have lost hope on what they can do bilaterally.”
It’s Trump’s first trip to China since 2017, and arrived in Beijing on Wednesday, ahead of talks planned for Thursday and Friday.
Experts agree that China has the upper hand.
For one, its exports have not suffered. For another, it has developed a gas pipeline through Central Asia, securing some of its energy needs, and is not tangled in wars in Iran or elsewhere.
“Right now is the best time for Xi to have this negotiation as the US is busy with wars, and domestically, Trump’s rating is low, and he needs a win, especially with midterm elections coming up in the US in November,” said Liang.
A Reuters/Ipsos poll late last month showed 34 percent of Americans approve of Trump’s performance in the White House, down from 36 percent in a prior Reuters/Ipsos survey in mid-April. Trump’s standing with the US public has trended lower since taking office in January 2025, when it was at 47 percent.
The US-Israel war on Iran and its retaliation in the Strait of Hormuz, a main chokepoint for oil and gas shipments, have sent energy prices soaring. On Monday, the international benchmark, Brent crude, was up 3 percent from Friday’s close at $104 after Trump said the ceasefire with Iran was on “life support”. That has also sent up prices at the pump to an average of $4.48 per gallon on Monday, according to GasBuddy data, with some states seeing much higher pain at $6.10 in California, $5.72 in Washington and $5.60 in Hawaii.
On Tuesday, data from the US Department of Labor showed that consumer inflation had jumped to 3.8 percent from a year ago, as the war with Iran pushed energy prices higher.
“Xi has no pressure domestically, but Trump will be eager to reach an agreement on something so he can present it domestically… he has a sense of urgency,” said Liang.
While Beijing’s need is not as immediate as Washington’s, it knows that tariffs and trade tensions are unsustainable and is therefore willing to negotiate, especially while it has the upper hand, experts say.
China wants regular access to high-technology chips, or at least tools to make them, so it can develop its own industry and expertise, as well as some concessions on Taiwan.
The US will also want Chinese help in reopening the Strait of Hormuz with its ally Iran.
“They’re basically inviting China to contribute to a marine expedition – it’s amazing how far the White House has come,” the Atlantic Council’s Roberts told Al Jazeera.
In exchange, the US will want China to commit to big-ticket purchases, including soybeans, Boeing airliners and energy supplies, such as coal and gas.
“So much of what the US is trying to accomplish now is undoing damage it created earlier,” said Roberts. “China is aware and astonished at their good fortune. They can sit back and let the US damage its global standing.”