Trump-Xi Washington Summit: Tariffs, Rare Earths, AI Issues and Response Strategies
Executive Summary
This summit between the U.S. and China, held for the first time in 11 years, is seen as having proceeded with a separation between symbolic procedures, such as state guest honors, and substantive outcomes. The agenda item of extending the trade truce decided at the Busan APEC is likely to emerge as a key achievement, but there is a possibility that a change in U.S. policy regarding arms sales to Taiwan and technology sanctions may be exchanged as a price, indicating that fundamental tensions have not been resolved. The issue of rare earths is expected to result in conditional easing rather than complete removal, and discussions on AI safety norms have been postponed without resolving differences over definitions. Given the dual persistence of the diplomatic track's favorable winds and the conflicts in regulatory agency tracks such as the Department of Commerce and the FCC, South Korean companies should continue independent risk management, such as securing alternative supply lines and checking export license schedules, without overreacting to White House announcements. The Taiwan issue has solidified into a structural red line rather than a negotiation card, necessitating long-term observation.
I. Issue Situation Analysis
Trump-Xi Washington Summit: Issue Situation Analysis
1. Background and Progress of the Issue
Chinese President Xi Jinping arrived in Washington on September 23 to begin a three-day state visit[1]. This is the first visit by a top Chinese leader to the U.S. in 11 years[8][12]. President Trump personally welcomed President Xi at Joint Base Andrews' runway[16]. It is unusual for a U.S. president to greet a foreign leader at the airport[16]. The White House prepared a state guest ceremony that included a welcoming ceremony and a review by the honor guard in the Rose Garden[6].
The follow-up meeting related to this summit was agreed upon during President Trump's visit to Beijing last May[1][6]. At that time, the so-called '3T' agenda of trade, technology, and Taiwan formed the framework of discussions[3]. The same agenda structure is being repeated at this Washington summit, which is the second of the year[10][12]. This indicates a continuity in managing relations, differing from the nature of the upcoming APEC summit in San Francisco in 2023[9].
Ahead of this summit, the military leadership contacts between the U.S. and China were restored[6][9]. Discussions on tariff reductions have also been ongoing[6]. This shows both sides' intent to project a managed competition posture. However, there are analyses suggesting that the Taiwan issue is solidifying as a structural red line rather than a negotiation card[9].
2. Current Situation
The summit was held at the White House on September 24 (local time)[7][19]. In his welcoming speech at the state guest ceremony, President Trump stated, "We will discuss urgent issues related to security, technology, and superintelligence (SI) with President Xi"[7]. He added, "The decisions we make in this area today can promote peace and prosperity for decades to come"[7][17]. In response, President Xi emphasized that the U.S. and China should choose cooperation over confrontation[7]. He stated that both countries should work together to keep AI under human control[7][15].
Australian media AFR reported that President Xi put the AI issue front and center from the beginning of the summit[15]. This is interpreted as reflecting an international atmosphere of growing concern about the potential damage if AI spirals out of control, while acknowledging the strong technological competition between the two countries[15]. In fact, ahead of and during the summit, Anthropic CEO Dario Amodei publicly urged for a slowdown in AI development, with voices of support from OpenAI's Sam Altman and SpaceX's Elon Musk[3]. This trend has added a sense of urgency to the AI agenda of this summit compared to previous years[3].
The overall tone of local media regarding the summit results can be summarized as "lavish protocol, meager substantive outcomes"[17][19]. Asian media outlets such as Malaysia's The Edge Markets, Singapore's Business Times, and Channel News Asia unanimously forecast that while the summit has significant symbolism, substantive agreements will be limited[17][18][19]. After the summit, President Trump stated, "We had a great meeting," reiterating his "truly great friendship" with President Xi[19]. However, it remains unclear whether there was any substantial progress on key issues, including Taiwan[19].
Preliminary negotiations between U.S. Treasury Secretary Mnuchin and Chinese Vice Premier He Lifeng also continued until just before President Xi's visit to the U.S.[10]. This indicates that practical coordination on trade issues such as tariffs and rare earths preceded the summit between the leaders[10]. The fact that the trade truce agreed upon last October in Busan is approaching its expiration in November also heightened the urgency of this summit[10][14].
3. Key Actors and Positions
The Trump administrationis focusing on securing visible economic outcomes at this summit[1]. It is observed that they desire tangible results, such as increased agricultural purchases[1]. President Trump himself emphasized the importance of decisions in the security, technology, and superintelligence agenda, highlighting that these decisions are directly linked to long-term peace and prosperity[7]. At the same time, he repeatedly emphasized his personal friendship with President Xi[17][19].
The Chinese governmentprioritizes preventing the re-ignition of the trade war and maintaining 'strategic stability' in bilateral relations[1]. The Brookings Institution analyzed that President Xi is likely to present the extension of the trade truce agreed upon last October in Busan as a key achievement of this visit[11]. In exchange, it is highly probable that President Xi will demand continued restraint from President Trump on issues related to Taiwan, new tariffs, and technology-related regulations[11]. In his opening remarks at the summit, President Xi emphasized cooperation on keeping AI under human control, projecting a collaborative image[7][15].
CEOs of U.S. big tech companiesare reported to have attended the state dinner in large numbers[4]. This suggests that the interests of American companies are being incorporated into the diplomatic framework amid the U.S.-China technological hegemony competition[4].
Peterson Institute for International Economics (PIIE)set low expectations ahead of this summit[2]. PIIE analyzed that while the summit results will not be meaningless, significant changes in each country's policies are not expected[2]. PIIE pointed out the path dependence of both countries' policies with the expression "inertia is a powerful force"[2]. Researchers at PIIE, including Chad Bown, Yeling Tan, and Adam Posen, are currently conducting separate assessments of the direction of U.S.-China economic relations and the substantive impact of the summit based on the latest economic analysis[13].
4. Summary of Key Issues
The issues of tariffs and rare earth supply chains are directly linked to the extension of the trade truce in Busan, and there is relatively more talk of the possibility of partial agreements[6][10]. In contrast, the Taiwan issue has become a red line for Beijing, which has set new arms sales as a reason for canceling the summit, and from Washington's perspective, it conflicts with domestic legal obligations, making a resolution structurally difficult[3][9]. The AI safety dialogue is also facing gaps in definitions, as President Trump rejects the notion of slowing down and China demands shared authority over safety definitions, making it difficult to narrow the conceptual divide[9]. Separate from the symbolic agreements between the leaders, there is a strong prospect that regulatory measures to control Chinese technology will continue to accumulate independently in the tracks of the U.S. Department of Commerce and the FCC[3][6][9].
II. In-Depth Analysis of Issues
Trump-Xi Washington Summit: In-Depth Analysis of Issues
1. Analysis of Root Causes
The reason this summit repeatedly revolves around the 3T agenda—trade, technology, and Taiwan—is that the nature of conflicts between the two countries is not a matter of interest distribution that can be resolved through negotiation. Tariffs and rare earths may be treated as negotiation cards. In contrast, the Taiwan issue is a matter of sovereignty for Beijing and a matter of domestic legal obligations for Washington[3]. Beijing maintains a red line that sets new arms sales approvals as a reason for canceling the summit[6][9]. This means it is not a subject of negotiation but a precondition for negotiation.
The root cause of the conflict surrounding AI has a similar structure. In his opening speech at the summit, President Trump presented AI and 'superintelligence' as central to the security and technology agenda[7][17]. In response, President Xi stated that both countries should cooperate to keep AI under human control[7][15]. While these statements appear to express common concerns on the surface, they actually stem from different calculations. The U.S. side's remarks are closely tied to the AI runaway risk raised by CEOs of Anthropic, OpenAI, and SpaceX, reflecting concerns from its own big tech industry[3]. The Chinese side's remarks are more about subtly expressing the demand to share authority over the definition of AI safety itself[9]. The Peterson Institute for International Economics pointed out this point, evaluating that "policy inertia is a powerful force"[2]. This means that both countries have no incentive to slow down their AI development.
2. Structural Context
Looking at the political structure, the negotiation priorities of Washington and Beijing are misaligned. The U.S. places emphasis on securing visible economic outcomes, such as increasing agricultural purchases, while China prioritizes preventing the re-ignition of the trade war and maintaining 'strategic stability'[1]. This asymmetry leads to issues of sustainability of agreements rather than the content of agreements. The Brookings Institution predicts that the two leaders, Trump and Xi, are likely to create headlines by extending the trade truce they reached last October in Busan[11]. In exchange, it is highly probable that President Xi will demand continued restraint on Taiwan, new tariffs, and technology-related sanctions[11].
In terms of economic structure, tariffs and rare earths operate as mutually dependent levers. Nikkei Asia, a subsidiary of the Nihon Keizai Shimbun, reported that the trade truce, which is set to expire in November, is being tested amid tensions surrounding tariffs, rare earths, and AI[10][12]. Rare earths are a supply chain card held by China, while tariffs are a market access card held by the U.S. The high level of mutual dependence on each other's cards creates a dual effect that both suppresses full-scale conflict and makes fundamental resolution difficult.
The most notable aspect of the security structure is the separation between the diplomatic track and the regulatory agency track. EAI analysis indicates that "separate from the symbolic agreements in the diplomatic track, a dual structure is expected to continue where regulatory measures to control Chinese technology accumulate independently in the tracks of the U.S. Department of Commerce and the FCC"[3]. This means that even if warm statements are exchanged between the leaders at the White House, it does not signal a reversal of the Washington bureaucratic organization's practical measures for controlling Chinese technology. Additionally, the pressure from hardliners in the U.S. Congress to reduce the executive branch's discretion also acts as a structural variable[6]. This indicates that the agreements between the leaders are politically vulnerable to sustaining.
3. Comparison with Historical Precedents and Similar Cases
This summit is compared to the Biden-Xi meeting at the APEC in San Francisco in November 2023. The previous meeting was characterized by an effort to mend relations that had been strained by the balloon incident[9]. In contrast, this Washington summit is a follow-up action based on the prior diplomatic engagement in Beijing last May, indicating a different nature[9]. It is not a meeting to repair a broken relationship but rather a meeting to extend an already agreed-upon management system. This difference lowers the target of the summit itself. The goal is not to prevent a breakdown but to maintain the existing uneasy status quo.
The Atlantic Council characterized this as an "uneasy pause," analyzing that both sides continue to test each other's red lines while avoiding reactions that could lead to escalation[5]. This expression encapsulates the pattern that has permeated U.S.-China relations over the past year. The Busan trade truce was also not a permanent resolution but a temporary reprieve, and it is strongly suggested that this summit will also extend that reprieve[11]. In other words, U.S.-China relations are solidifying a pattern of repeatedly renewing temporary measures between fundamental resolution and total breakdown.
The new agenda of AI safety dialogue is also structurally similar to existing arms control negotiations. Just as U.S.-Soviet nuclear disarmament negotiations during the Cold War stalled for a long time due to disagreements over mutual verification systems, the current U.S.-China AI safety dialogue is also struggling to narrow the gaps over the definition of 'safety' itself[9]. However, there is a decisive difference. While nuclear weapons were assets held only by states, AI is being developed by private companies such as Anthropic and OpenAI[3]. This creates a new structure where it is difficult to ensure the effectiveness of regulation through inter-state negotiations alone.
4. Key Variables Shaping Issue Development
The first variable to note is the expiration date of the trade truce scheduled for November[10][12]. As this deadline approaches, both sides have an incentive to derive at least a minimal extension agreement during the summit. However, the key question is what will be exchanged as the price for the extension. As pointed out by the Brookings Institution, there is speculation that U.S. restraint on the Taiwan issue, postponement of new tariffs, and restraint on technology sanctions may be discussed as a package[11].
The second variable is the independent movements of the U.S. Congress and regulatory agencies. Even if an agreement is reached between the leaders, it is highly likely that the regulatory measures for controlling Chinese technology by the Department of Commerce and the FCC will continue to accumulate on a separate track[3][6]. Whether the outcomes of the summit are reflected in actual policies will depend on the direction of this regulatory agency track.
The third variable is the trajectory of the discourse on AI industry development risks. Given that the calls for a slowdown from CEOs of Anthropic, OpenAI, and SpaceX added urgency to the AI agenda of this summit[3], future public statements or policy suggestions from these companies may again influence the attitudes of the U.S. and Chinese governments toward AI negotiations.
The fourth variable is whether Beijing will maintain its red line surrounding the Taiwan issue. If new arms sales approvals are actually made, there is speculation that Beijing may respond by nullifying the overall outcomes of the summit[6][9], making this issue one of the most unpredictable risks in subsequent phases.
III. Final Recommended Response Strategies
Trump-Xi Washington Summit: Comprehensive Response Strategies and Action Plan
1. Comprehensive Assessment and Recommended Response Strategies
The results of this summit appeared in a form where symbolism and substance were separated. President Trump assessed, "We had a great meeting"[19]. However, the tone of Asian regional media is cool. The Edge Malaysia, Business Times, and Channel News Asia all summarized the summit with the same expression: "lavish protocol, meager substantive outcomes"[17][18][19]. This assessment serves as a basis for the South Korean government and companies to avoid overreacting to the summit results.
The key assessments are threefold. First, the extension of the Busan trade truce is likely to establish itself as a substantive outcome of the summit[11]. This signifies short-term stability in the areas of tariffs and rare earths. Second, there is a possibility that Washington will exchange restraint on arms sales to Taiwan and technology sanctions as a price for this[11]. This may be interpreted as a temporary suppression of risks in the Taiwan Strait, but it does not fundamentally resolve the issue. Third, the AI safety dialogue will be postponed without resolving differences over definitions[9]. President Xi's proposal to keep AI "under human control"[7][15] and President Trump's elevation of superintelligence to a security agenda[7][17] are merely superficial common denominators and do not lead to actual normative agreements.
The response principles derived from these three assessments are clear. The favorable winds in the diplomatic track and the coldness in the regulatory agency track should be viewed separately. The U.S. Department of Commerce and the FCC's measures to control Chinese technology will continue to accumulate separately from White House announcements[3][6]. South Korean companies should develop supply chain strategies based on this dual structure.
2. Short-term Action Plan (Immediately after the summit to 3 months)
The first priority is to meticulously compare the wording of the joint statement or fact sheet released immediately after the summit. It is necessary to confirm the status of the trade truce extension, the duration of the extension, and the range of tariff adjustments. Given that the November expiration deadline of the Busan trade truce is approaching[10][12], it is essential to immediately assess the impact of the announced extension conditions on the actual semiconductor and secondary battery supply chains.
Regarding rare earths, it is necessary to confirm whether China will ease its export controls and the scope of their application. Rare earths operate as mutually dependent levers for both the U.S. and China[10][12], so it is likely to result in conditional easing rather than complete removal. South Korean secondary battery and electric vehicle component manufacturers should continue to secure alternative supply lines regardless of the summit results.
In the AI sector, under the premise that specific normative agreements are unlikely to emerge, it is necessary to track the schedule for the announcement of the U.S. Department of Commerce's semiconductor export control measures to China. It is important to recognize that there is a time lag between the warm statements exchanged between the leaders and the actual actions of regulatory agencies, and proactively check the schedules for renewing export licenses for domestic semiconductor companies' equipment and materials to China.
3. Medium-term Action Plan (3 months to 1 year)
The Taiwan issue should be approached on the premise that it is solidifying into a structural red line rather than a negotiation card[9]. Considering that Beijing previously set new arms sales to Taiwan as a reason for canceling the summit[6][9], any changes in Washington's Taiwan policy will serve as a leading indicator of the overall temperature of U.S.-China relations. The South Korean government should maintain independent cooperation channels with the Taiwanese semiconductor industry, separate from the situation in the Taiwan Strait, while ensuring that this is not exposed as a byproduct of U.S.-China conflicts.
The pressure from hardliners in the U.S. Congress is also a variable. If legislative attempts to reduce the executive branch's discretion continue, the political sustainability of agreements between the leaders may be shaken. South Korean companies should establish a dual monitoring system that tracks not only the White House announcements as final conclusions but also legislative trends in Congress and the regulatory revision processes of the Department of Commerce.
In the case of AI safety dialogue, under the premise that differences over definitions will not be resolved in the short term, it is necessary to analyze the exposure of domestic AI companies to dual export controls to China and the U.S. and to diversify compliance systems. A response to technology standards that does not subordinate to either side is required in areas where U.S. and Chinese standards conflict.
4. Long-term Action Plan (More than 1 year)
Assuming that the U.S. and China will continue to maintain a posture of "managed competition" for the time being, South Korea should adopt an approach that evaluates practical benefits on a case-by-case basis rather than fully aligning with a specific camp. As pointed out by the Peterson Institute for International Economics, as long as "policy inertia is a powerful force"[2], there is a high likelihood that agreements will be repeated at the level of fine-tuning rather than fundamental shifts in the policies of both countries. This has dual implications for South Korean companies, providing a predictable risk environment while making fundamental resolution of uncertainties difficult.
The EU's multilayered approach to regulating technology in relation to China can serve as a reference model for South Korea[6]. This involves separating security-related items from commercial items and varying the intensity of regulations. The South Korean government needs to pursue legislative reforms to institutionally distinguish between security-related issues and purely commercial areas within the semiconductor and secondary battery supply chains as a long-term task.
5. Monitoring Indicators and Trigger Points
In the trade and tariff area, the actual extension of the Busan trade truce and the duration of the extension are primary indicators. The official announcement wording at the time of the November deadline must be analyzed in detail[10][12]. It should also be checked whether the range of tariff adjustments expands or contracts compared to previous agreements.
In the rare earth area, the speed of export permit issuance by the Chinese Ministry of Commerce and the scope of applicable items are indicators. Even if easing measures are announced, it is necessary to reconfirm their implementation through actual customs data.
In the Taiwan area, the announcement of U.S. Defense Department approvals for arms sales to Taiwan is a trigger point. It is the top priority indicator to confirm whether the red line set by Beijing is actually functioning[6][9], and if approvals are made, it opens the possibility of a sharp escalation in tensions in U.S.-China relations.
In the AI and technology control area, the revision of the export control list by the U.S. Department of Commerce's Bureau of Industry and Security (BIS) and the related regulations announced by the FCC are indicators. Whether actions accumulate in this track, regardless of the conciliatory statements from the summit, is a key basis for gauging the substantive direction of U.S. policy toward China[3][6].
In congressional trends, it is necessary to track the progress of deliberations on bills aimed at reducing executive discretion proposed by hardline lawmakers. If these bills lead to actual legislation, the binding force of agreements between the leaders may be weakened.
6. Summary Conclusion
This Washington summit was a venue for reaffirming partial stability in the areas of tariffs and rare earths as an extension of the May Beijing agreement[6]. However, structural issues such as the Taiwan problem and the definition of AI safety were not resolved and will carry over into the next round[3][9]. It is judged that the dual structure of the symbolic warmth in the diplomatic track and the substantive coldness in the regulatory agency track will persist for the time being[3][6]. The South Korean government and companies need to establish a system that separates risk management in security-related areas from securing incidental benefits in commercial areas based on this dual structure. The superficial wording of the summit results will be less accurate indicators of the actual direction of U.S. policy toward China than the individual actions of the Department of Commerce and the FCC, legislative trends in Congress, and the approval status of arms sales to Taiwan that will unfold in the following months.
References
[1] [Hankyoreh] Trump-Xi Meeting on 24th... U.S. 'Achievements' and China 'Stability' Priorities
[4] [Hankyoreh] U.S.-China Summit 'AI' 'Tariffs' Major Agenda... U.S. Big Tech CEOs Attend Dinner
[8] [Council on Foreign Relations (CFR)] Ten Issues to Watch at the Trump-Xi Summit in Washington
[10] [Nikkei Asia] Trump-Xi summit live: U.S. president hosts state dinner with tech leaders
[11] [Brookings Institution] Why Beijing isn’t taking the bait with Trump
[12] [Nikkei Asia] Trump-Xi summit live: U.S. president hosts state dinner with tech leaders
[14] [Nikkei Asia] Trump and Xi set to talk trade and AI as truce hangs in balance
[15] [Australian Financial Review] ‘Always under human control’: Xi gives AI warning to Trump
[16] [Wired] AI, Tariffs, Rare Minerals: What to Expect From Trump’s Upcoming Summit With Xi Jinping
[20] [Cyprus Mail] Trump-Xi summit in Washington begins with great fanfare but low expectations
[23] [The Globe and Mail] Trump rolls out the red carpet for China’s Xi as both sides seek stability
[24] [South China Morning Post] U.S. announces AI dialogue with China, launches Board of Trade
[25] [Daily Sabah] Top U.S., Chinese officials set for AI, trade, minerals talks
*This text is an AI translation of an original written in Korean. Some translations or nuances may be inaccurate.
This report is an in-depth analysis planned by an EAI researcher, grounded in sophisticated AI-assisted research, and finalized by the EAI researcher.
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