What Did Trump and Xi Agree to at the White House?

State of Play

CSIS experts provide a rapid assessment of the recent summit between President Trump and Xi Jinping at the White House. The discussion evalu

Key takeaways

• The economic truce between the U.S. and China has been extended only until January.
• A $15 billion package for Taiwan arms sales and military financing is currently awaiting a decision from the Trump administration.

Main topics

• U.S.-China Summit Outcomes
• Taiwan Security and Arms Sales

Notable quotes

I see it more as a kind of truce or a ceasefire, and I think it's quite fragile.

Conclusion

The episode provides a deep dive into the precarious state of U.S.-Chi

Transcript preview

Speaker 3 (0:00) Xi Jinping is a few blocks away from us for his first state visit in over a decade. Yesterday, he met with President Trump for discussions that were expected to cover trade, AI, Taiwan, and more. What were expectations going into the summit? What do we know about what happened? And how will it be received around the world? I'm your host, Will Todman, and today on a live episode of State of Play, What did Trump and Xi agree to at the White House? Speaker 3 (0:37) OK, well, I am delighted to be joined today by four of our leading China experts at CSIS to discuss what has just happened over the last few days. And I should say from the outset, we are recording this before we have had the fact sheets out. We don't know the full information about what has happened. It is just about ten past nine. For those of you who aren't watching this live on Friday, the 25th of September. But anyway, to guide us through the context and what we know about what did happen in the studio, we have Ambassador Edgard Kagan, who is a senior advisor and Freeman Chair in China Studies. For the first time in the studio, welcome Professor Tom Christensen, who is a professor at Columbia University and also the Pritzker Chair here at CSIS. And then joining remotely, we have Dr. Bonnie Lin, who is a senior advisor and director of the China Power Project. Welcome, Bonnie. Thanks for being with us. And also joining us before the sun has even risen, where he is, Dr. Scott Kennedy, who is senior advisor and trustee chair in Chinese business and economics. Thanks so much for joining, Scott. Good morning. So we have. braved the traffic. There are a lot of road closures around us. This is still very much going on. I think the president is going to be meeting with Xi for tea, I think, at 10.30 this morning. But I wanted to start by talking about the context of where US-China relations were going into this summit. So the last summit we had was in May in Beijing. And that had originally been planned for March, but was delayed due to the war with Iran. But, Edgard, can I start with you? How do you see the broad trajectory of U.S.-China relations coming into this summit? Speaker 2 (2:35) I think what we saw in May built on the meeting that the two leaders had in Busan almost a year ago, which was a significant shift from a period of confrontation of increasing economic pressure, growing tariffs by the U.S. and then China finally unveiling and really fully using its rare earths and putting an embargo essentially on exports of rare earths in ways that were profoundly unsettling for the global economy. The two leaders in Busan agreed to a truce. That was reinforced by what we saw in Beijing. And my view is the expectations coming into this were that there's been a real sea change in the relationship from a period of confrontation, certainly competition, to one where the two leaders are trying to push for some level of coexistence or detente in the form not just of a truce, but the idea of pushing for stability in the relationship. I think what's striking about this is the degree of warmth that the president has shown for Xi Jinping. I have never seen, and I don't think any of us have seen, an American president go to the White House or go to Andrews Air Force Base for anyone other than the pope. The level of ceremonial at the White House itself was, in my view, quite extraordinary. And again, a lavish welcome, ceremonial, showing the president's personal desire. And it's worth keeping in mind, protocol arrangements like this are something the president controls entirely. And this is the president showing his desire for a strong relationship with Xi Jinping as a way of trying to stabilize the relationship with China. Speaker 3 (4:20) Is it fair to say most state visits are usually for U.S. allies and partners? Although, of course, I mentioned that the last state visit was 2015. Of course, that was under President Obama. But this is still a big deal that this is a state visit. Speaker 2 (4:35) The U.S. doesn't do a lot of state visits. The Trump administration actually does fewer. And there's a number of reasons for that. One is that... Most White Houses don't like them because they suck up a huge amount of time. And time is the most precious commodity that any White House has. And the other is that a lot of American presidents don't like all the ceremonial. So this is where they're not always for allies and partners. I mean, they are used as a tool to signal, in some cases, reinforcing alliances and partnerships. But they're also used as a tool to signal a change in a very. important relationship. So you've seen over the years, this is, depending on how you count, this is the fifth or sixth Chinese state visit. Officially, the Hu Jintao visit in 2006 wasn't considered a state visit, but President Bush treated it as a state visit and had all the ceremonial. And so it's a sign we've done this for the Chinese before. Yep. Speaker 3 (5:32) Okay. Where do you see the US-China relationship, Tom? Speaker 1 (5:36) Yeah, I think a lot of people think we're in a detente, that this is a very significant change in US-China relations. I see it more as a kind of truce or a ceasefire, and I think it's quite fragile. When I look a year out from now, I expect a lot of trouble in the relationship. Even on the economic front, where we've extended the truce for another couple of months into January, there's already a lot of friction with the deals that were cut at Busan and in May in Beijing. The Chinese are not very satisfied. with the flow of high tech from the United States and the restrictions on high tech. The Chinese are not particularly satisfied. with the growing list of entities on the Commerce list and on the Defense Department list or the Pentagon's list. And the U.S. is not satisfied with China's flow of rare earths and rare earth magnets, nor is the United States fully satisfied on agricultural purchases. So just on economics, you have friction. And when I look at security issues, I think the Trump administration is going to be increasingly frustrated over Iran and over Russia. China is the biggest partner of both of those actors. Speaker 5 (6:43) So Speaker 1 (6:44) the temptation to pressure China to put pressure on those actors to reach more desirable outcomes in the war in Ukraine and in the Middle East, I think will be great. And then when Speaker 5 (6:56) I Speaker 1 (6:56) look at Taiwan, I think after the May summit, President Trump changed the Chinese expectations on Taiwan by discussing Taiwan arms sales in a certain way that made it seem like it was a negotiable. element of U.S.-China relations. So I expect in the next year or so for the United States to sell arms to Taiwan. The forces that are in place to sell arms to Taiwan are very strong. Congress wants to sell arms to Taiwan. Most of the expert community, including myself, believe Taiwan needs the weapons that are supposed to be sold to them. And I think that with a $30 billion special budget already passed through the Legislative UN in Taiwan, the desire to sell the weapons is going to be very great. So I expect the United States to sell them, and I don't know if the Chinese reaction will be even stronger than it normally is, given the context of the May summit. And then finally, you have AI. And I personally think AI is an opportunity for cooperative. discussions between the United States and China. But it doesn't really seem like we're on the same page about the content of those discussions. But it does seem a place where we do have actual common interests. I don't think either country has an interest in seeing the AI models break out of the control of the engineers who created them. But whether that's going to be the tone of the discussions and the content of the discussions is another matter altogether. Speaker 3 (8:24) Interesting. So I want to come back to Taiwan. But Scott, maybe I can go to you next and keep this thread on the economic truce. Obviously, this is something that you focus a lot on. So how would you characterize the state of this so-called truce? Is Tom right that this is not a detente, but a fragile ceasefire? Speaker 4 (8:47) I think that's a fair characterization. I would never disagree with Tom Edgard or Bobby. But so, yes, I do think that we are in a fragile period where things are quiet. You know, I think it's important, as Edgard said, that, yes, the president's preferences override everything. He wants stability. He wants the pomp and circumstance. He wants the close. personal relationship with Xi Jinping, at least how that is expressed. Maybe because he really wants to get along, maybe because he thinks ingratiating himself with Xi will give the U.S. more leverage down the road. And of course, the Chinese want stability as well. They're facing a lot of restrictions from the U.S. in terms of tariffs are down from where they were before, but they're still high. higher than on other countries. And export controls are still on a lot of Chinese technology and a lot of Chinese companies still on the entity list. But I think, you know, we're in this moment that we're seeing playing out in the White House also because of China's effective use of the rarest card. and pushing back against the highest tariffs and the highest export controls. And that's why we got the ceasefire in Busan last October, why it was reconfirmed in May, and why that is a central part of the conversation right now. I would also say that in terms of the discussion about economics, whether it's about the ceasefire or sales of products like aircraft or ag goods or energy, the ambition is amazingly low, amazingly low what they're discussing. And if we just compare and maybe come back to this, to Xi Jinping's last state visit in September of 2015, 11 years ago, the agenda then was much more expansive across the board on the South China Sea, on cyber, on Iran. on bilateral investment treaty, on a bunch of issues. And we didn't achieve everything. And that's partly why we're here today. But the ambition, the contrast is really stark. And I think that means that the relationship is, as Tom said, in a much more fragile place. Speaker 3 (11:17) Interesting. Great. Thank you. Bonnie, over to you. I don't know if you want to pick up on the security piece or how you see U.S.-China relations in the context of this summit. Speaker 5 (11:28) Yeah, thank you. Well, it's great to be with such excellent friends from CSIS as well as great colleagues. I very much agree with what Tom mentioned already in terms of a good portion of the security piece. I would just add on the Taiwan side, Tom mentioned the delayed arms sales, but President Trump and Tom also mentioned that President Trump is under a lot of pressure from Congress. I'll just flag the letter from the four Republican senators to President Trump that highlighted not only the 14 billion in Taiwan arms sales that is waiting for his... approve the move forward, but also the 300 million in terms of State Department foreign military financing, as well as the 1 billion that Commerce approved for Department of Defense to also give to Taiwan for the Taiwan Security Cooperation Initiative. So in total, there's 15 billion that's still awaiting some form of decision. Beyond Taiwan, what I would mention is in terms of security issues leading up, Iran was mentioned already, but I think it's also important to flag what's going on in South China Sea. We've seen China have a particularly a number of incidents and tensions with the Philippines over the summer. And I think one incident that we'll probably talk about that's happened this week over particularly over Second Thomas Shoal. At the same time, we continue to see China increase significant pressure against Japan, particularly economic