The Trump-Xi Summit: China Negotiating from Strength?
- May 13, 2026 |
- IDSA Comments
Beijing has appeared more confident and pragmatic in dealing with the Trump 2.0 administration. Drawing on its experience with Trump’s tariff policies and the Biden administration’s curbs, China has been active in retaliating to impose costs on the US this time. Simultaneously, the leadership has doubled down on insulating the Chinese economy from external pressures. Taken together, what clearly emerges is that while China will drive a hard bargain to maximise diplomatic and material concessions from Trump in bilateral engagements, it will also aim to strengthen its strategic immunity against the US further.
In the second term of the Trump administration, Chinese bargaining vis-à-vis the US has exhibited greater risk tolerance and willingness to adopt measured escalation.[3] Notwithstanding the economic strain and impact of reciprocal tariffs on Chinese domestic industries and foreign investments, Beijing not only matched US tariffs but also restricted the flow of rare earth minerals. While there were no winners in the trade war, Washington’s negotiated scaling down of tariffs, along with the pausing of a 400 million USD arms aid to Taiwan, was perceived by Beijing as a success, enabling it to utilise its economic leverage to safeguard its interests against US measures and claim relative parity with the latter.[4]
In the period leading up to Trump’s visit, as trade frictions continued, the same pattern was observed. For instance, in March, the Chinese Ministry of Commerce launched retaliatory probes against US practices and measures that hindered global production, supply chains, and the trade of green products after the Office of the U.S. Trade Representative initiated an investigation against China and 15 other countries over the issue of overcapacity.[5] Similarly, in May, China also, for the first time, invoked the Rules on Counteracting Unjustified Extra-territorial Application of Foreign Legislation and Other Measures, a counter-sanction law passed in 2021, and asked Chinese companies to ignore US sanctions linked to Iranian oil trade. An article in the People’s Daily described China’s move as a “pivotal step” to resist US long-arm jurisdiction.[6] Thereafter, Beijing also blocked Meta’s acquisition of the Chinese-founded AI startup Manus, which operates in Singapore, further signalling that pursuing a deal with the US might not impede the government from asserting its strategic interests in a way that could be perceived as offensive by Washington.[7] Commentators argue that this indicates the Chinese leadership’s growing confidence that, given China’s economic and technological strength, Beijing can now manoeuvre what is up for bargaining without risking total collapse of bilateral ties. [8]
Strengthening strategic immunity against the US is a multi-dimensional effort. Enhancing technological innovation and industrial and supply chain resilience are its two core pillars. Cultivating self-reliance in tech has always been a top priority for the Party leadership; however, intensifying competition with the US has deepened the sense of urgency in Beijing to enhance the country’s innovation capacity.[9] Over time, the discourse has shifted from self-reliance to attaining domination and leading in “original and disruptive innovation” in basic and frontier fields.
Simultaneously, supply chain resilience, especially amid external volatility and coercion, is seen as crucial to ensuring greater national resilience and international competitiveness.[10] In the past few years, China has adopted various strategies, namely expanding its regulatory mechanisms to manage risks from foreign tariffs and trade controls, and diversifying export markets and overseas production facilities to strengthen both its industrial and supply chains.
Notably, the 15th Five-Year Plan (FYP) period places a high priority on tech innovation and on industrial and supply chain resilience as national security issues. In accordance with the recommendations of the Fourth Plenary Session of the 20th CPC Central Committee to ‘significantly improving the level of self-reliance in science and technology’ and ‘further consolidating the national security barrier’, the government in the final draft of the five year plan has called for ‘adopting extraordinary measures to achieve decisive breakthroughs in key core technologies’ and strengthening orientation towards original and disruptive innovation.[11]
Similarly, days before Trump’s proposed visit, Xi, at a symposium in Shanghai held on 30 April, urged relentless strengthening of original innovation capacity to build China into a scientific and technological power.[12] The resilience of the supply chains is intertwined with this goal. Thereby, at the same Fourth Plenary Session, Xi had emphasised that taking the lead in technological breakthroughs would have to be accompanied by building a safe, stable, and efficient industrial and supply chain.[13] This, in turn, would enable China to dominate the new wave of the tech revolution and enhance its bargaining power and response to external shocks.
Underscoring this importance, the State Council, in April 2026, released sweeping supply chain security laws which directed the relevant agencies to work on industrial and supply chain security consistent with the “overall national security concept” and improve risk monitoring for key industrial and supply chains.[14] More importantly, the laws empower the government to retaliate with countermeasures against perceived threats to the country’s supply chain risks.[15] From Beijing’s perspective, irrespective of changes in administration, the agenda to curb China’s rapid economic and technological progress enjoys bipartisan support. Chinese leaders anticipate a more entrenched rivalry with Washington. Therefore, Beijing will remain steadfast in tightening its grip on critical technologies, industries and supply chains.
Conclusion
As China and the US enter talks that could reshape global economic and strategic dynamics, New Delhi is also preparing to host the BRICS Foreign Ministers’ Meeting, which will see discussions on technology partnerships, digital innovation, and energy and food security, among other issues. In this context, the key takeaway for New Delhi is that the posturing by both major economies does not serve India’s interests. An anti-China stance is unlikely to translate into pro-India policies. Similarly, the concessions China will draw from the US regarding its geopolitical influence in the region will affect India’s calculus. India’s priority should therefore be to diversify and strengthen partnerships to enhance its strategic flexibility, formulate defensive measures to resist coercive measures from both China and the US, and, finally, fuel domestic capabilities in critical technologies and control over key industrial and supply chains.
Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.
[1] “The Growing Push to Halt and Reverse the New Nuclear Arms Race”, Arms Control Association, Vol. 18, Issue 1, Feb 12, 2026.
[2] Miriam Schive, “What’s Next for US–China Relations? 5 Areas Ripe for Cooperation”, World Economic Forum, 4 May 2026.
[3] Elise Bukowski, Liz Wang, “Negotiating Power: China’s Approach to U.S. Relations Under Trump 2.0”, APCO, 11 November 2025.
[4] “At the Trump-Xi Summit, China Will Have the Upper Hand”, Expert Take, Council on Foreign Relations, 10 May 2026. Helen Davidson, “Trump’s Reported Pause on Taiwan Weapons Aid Sparks Fears he is using Island for China Trade Deal”, The Guardian, 20 September 2025. No 3.
[5] “China Launches Trade Barrier Probes into US Actions”, The State Council Information Office, The People’s Republic of China, 30 March 2026.
[6] “China’s Unprecedented Defiance of U.S. Sanctions Triggers Showdown”, Bloomberg, 4 May 2026. “‘Unprecedented’: China’s Blocking Ban on US Sanctions Draws US Media Attention”, Global Times, 5 May 2026.
[7] Wang Xiangwei, “China’s Manus Block a show of Strength ahead of Xi-Trump Summit”, SCMP, 4 May 2026.
[8] Lingling Wei, “Beijing Deploys Long-Threatened Economic Arsenal Against U.S. Pressure”, The Wall Street Journal, 5 May 2026.
[9] Meaghan Tobin, Christian Shepherd and Lily Kuo, “China’s Xi Promises to Build ‘Great Wall of Steel’ in Rivalry with West”, The Washington Post, 13 March 2023.
[10] Fan Chen, “Xi Jinping Urges ‘Disruptive Innovation’ to Boost China Amid High-Stakes US Tech Race”, 30 April 2026.
[11] Xie Bo and Tan Yiyi, “Study and Implement the Spirit of the Fourth Plenary Session of the 20th Central Committee of the Communist Party of China”, 27 February 2026. “Outline of the 15th Five-Year Plan for National Economic and Social Development of the People’s Republic of China”, The Central People’s Government of the People’s Republic of China, 13 March 2026.
[12] “Unremittingly Improve China’s Original Innovation Ability”, Youth.cn, 4 May 2026. “At the symposium on strengthening basic research, Xi Jinping emphasized that we should strengthen basic research with greater efforts and more practical measures to further lay a solid foundation for building a scientific and technological power”, QsTheory.cn, 30 April 2026.
[13] Jiang Chuanhai, “Improve the Resilience and Safety of China’s Industrial and Supply Chains”, QsTheory, 13 March 2026.
[14] “Provisions of the State Council on the Security of Industrial and Supply Chains (Order of the State Council of the People’s Republic of China No. 834)”, Ministry of Ecology and Environment of the People’s Republic of China, 8 April 2026.
[15] Arendse Huld, “China’s New Supply Chain Security Regulations: What Are the Risks to Foreign Companies?”, China Briefing, 20 April 2026.
