The summit meeting between Donald Trump and Xi Jinping may have seemed like a symbolic gesture, with the announcement that giant pandas would be returning to a zoo in Atlanta, Georgia, being the only notable outcome. However, most of the real outcomes of this meeting are hidden from sight.
Business leaders may have felt disappointed by the lack of substance, but this sentiment would be mistaken for several reasons. State visits, like the one between Trump and Xi, come with ceremony and symbolism, which assist in creating a political mood.
Trump’s decision to roll out the red carpet for Xi will not have been universally applauded by many in the Republican Party, including the vice president, secretary of state, and secretary of defense, who are all more skeptical about Beijing than the President. Beijing will appreciate this gesture.
Hidden Outcomes
Summits like this are often referred to as “iceberg occasions,” where most of what is happening is hidden. The serious action occurred in meetings away from the White House, involving key players like Scott Bessent, the US treasury secretary.
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The agreement to extend the existing trade truce until at least January 10th next year is worth noting closely. This development could have significant implications for international trade and commerce.
In the middle of these negotiations, it’s clear that the US and China are working towards a more stable trade relationship. For companies operating in this space, a more permanent arrangement on trade and tariffs could provide a much-needed sense of certainty, allowing them to plan for the future with more confidence.
Future Meetings
These talks did not take place in isolation. This was the second time Trump and Xi have met this year, and they are likely to speak twice more before the year is out: at the Asia-Pacific Economic Co-operation summit in Shenzhen, China in November and the G20 leaders assembly hosted by Trump in Miami, Florida in December.
These future meetings will be working deliberations rather than carefully staged events. If there is to be a Trump-Xi bargain, it will emerge from these conversations, which will take place after the US mid-term elections on November 3rd.
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Businesses can anticipate two public and one private understanding. There is a strong chance of a more permanent arrangement on trade and tariffs, which could keep tariff numbers where they are or nudge them down slightly.
Additionally, there is likely to be movement on information sharing around artificial intelligence developments. While the US and China are often described as being in an artificial intelligence “race,” they are actually competing in different events.
The US is determined that one of its tech giants will secure artificial general intelligence first, while China is more focused on the practical implementation of artificial intelligence across its economy at high speed due to demographic challenges. There is wiggle room here for both sides to avoid an accidental artificial intelligence calamity.
A private understanding concerning Iran is also likely. Trump needs China to lean on Tehran to reopen the Strait of Hormuz. In return, Xi will want the United States to make it clear to Taiwan that any declaration of outright independence would be totally unacceptable.