1. Iran war
Trump is eager for China to lean on Tehran to advance peace talks and reopen the strait of Hormuz. To now, Beijing has sat back and watched the US struggle against Iran, at least publicly. But with about half of China’s crude oil imports passing through the strait, Xi does want the waterway unblocked. China knows its exports will suffer if a global recession results from an oil supply crisis.
Complicating the picture, the US this week sanctioned several Chinese firms accused of assisting Iranian oil shipments and supplying satellite imagery allegedly used in Iranian military operations, claims that Beijing denied. Trump’s arrival comes after Iran’s foreign minister Abbas Araghchi visited Beijing last week.
2. Taiwan
Beijing is keen to push the US on Taiwan, with Trump saying he is prepared to raise the issue of arms sales to the island, which China claims as a breakaway territory despite never having ruled it. In December, Trump authorised an $11bn arms package for Taiwan, the largest weapons sale ever to the island, but no shipments have been made yet.
Xi may seek changes in how the US refers to Taiwan. Ideally, from the perspective of Beijing, this would be a statement from Washington ‘opposing’ Taiwan’s independence rather than ‘not supporting’ it. Taiwan will be watching closely. Just two weeks ago, China’s foreign minister in a phone call with Marco Rubio urged the US to ‘make the right choices’ on Taiwan.
With Trump known to veer off script, John Kirby, a former US state department and Pentagon spokesperson cautioned: “They just have to be so extraordinarily precise when you’re talking about Taiwan because, quite frankly, the stakes are enormously high.”
3. Artificial intelligence
China and the US are currently locked into a race on artificial intelligence that is becoming something of a technological cold war.
In April, the White House accused China of stealing US AI labs’ intellectual property on an industrial scale, claims Beijing denied. Meanwhile, Beijing has been frustrated by Washington’s reluctance to allow Nvidia to export its most powerful processing chips to China. In January, the White House said Nvidia could export its second most powerful chip, the H200, but no shipments have been sent yet.
Analysts and ethics leaders hope Trump and Xi will discuss non-binding AI guidelines, including sharing information about AI misuse and safety, which are seen as critical guardrails amid the advent of AI weaponry and military adoption.
4. US-China trade
Trump has repeatedly threatened China over trade, imposing tariffs above 140% last year. But Xi held some cards of his own and did not fold. Instead, China blocked exports of its rare earth minerals and magnets to the US. Trump, finally, backed down. The US has depleted notable levels of its weapons arsenal in the war against Iran, with many weaponry components requiring critical minerals that are linked to supply chains dominated by China.
China is expected to announce purchases related to Boeing airplanes, American agriculture and energy, US officials have said. In turn, Beijing wants the US to ease curbs on exports of advanced semiconductors. Beijing also wants to reduce barriers to investment in the US, and hopes to establish a Board of Investment to match the Trump-back Board of Trade.
5. Fentanyl
Fentanyl is a key item on Trump’s agenda this week, Politico reported, citing an administration official granted anonymity to preview the closed-door sessions. The US has long accused Chinese businesses of knowingly supplying the chemical precursors to Mexican cartels who use them to make the drug. Trump knows that being seen to press China hard over fentanyl and precursors plays well with his Maga base.
But Trump lost important leverage on the fentanyl front when China defied his tariffs threats. In March, the US and China clashed over fentanyl and trade at a UN drugs meeting. China wants to be removed from the state department’s annual list of ‘major drug transit or illicit drug producing countries’, due to be updated in September.
