Presidents Trump and Xi prepare to talk trade, tariffs and tech

World Business Report

The episode examines the high-stakes diplomatic meeting between US President Trump and Chinese President Xi Jinping regarding trade, tariffs

Key takeaways

• China is investing $75 billion in AI infrastructure, specifically building data centers in Inner Mongolia to leverage wind and solar resources.
• The US-China summit is viewed by analysts as a 'test of guardrails' for technology and trade rather than a source of immediate substantive breakthroughs.

Main topics

• US-China Trade Summit
• AI Infrastructure and Competition

Notable quotes

The world's two top leaders are meeting in Washington.

Conclusion

The episode illustrates how geopolitical tensions, organized crime, an

Transcript preview

Speaker 5 (0:00) This BBC podcast is supported by ads outside the UK. Speaker 1 (0:06) It's late 2007, and while attending a Christmas party, Facebook's Mark Zuckerberg meets a woman who would change the course of his company forever. She joined Facebook as chief of operations in 2008 and has been credited for making the company profitable. And herself enormously rich. On Good Bad Billionaire, we're exploring the life and fortune of billionaire tech leader Sheryl Sandberg. Listen now, search for Good Bad Billionaire wherever you get your BBC podcasts. Welcome to the Haunted Library. Have you come in search of a tale? This podcast invites you to browse the shelves and find stories that will linger long after you've left this place. From gothic masterpieces to pulpy penny dreadfuls, join me, Colin Morgan, with new episodes twice a week. Find The Haunted Library wherever you get your podcasts. Speaker 2 (1:09) The world's two top leaders are meeting in Washington. What should Trump do? He has a choice to Speaker 1 (1:14) make. Once again, bend the knee to the CCP or stand up to Xi. Speaker 2 (1:20) Or will US-China love break out instead? I think they Speaker 3 (1:24) have a lot of practical things to do. You know, get rid of a tariff of 30 billion on each side. If a composed country can work together, we're Speaker 2 (1:31) going Speaker 3 (1:31) to see a better world Speaker 2 (1:32) ahead. A presidential get-together here on World Business Report from the BBC World Service. Speaker 2 (1:40) Yes, I'm Ed Butler. And as President Xi lands in Washington as we speak, we're raising the curtain on this week's long-awaited US-China summit. Also in the show, law enforcement gathers in Cambodia to consider the global scourge of international scam centres and why McDonald's, the king of the beef burger, is now betting heavily on chicken instead. Speaker 2 (2:09) So more or less right now, the leaders of the world's two biggest economies are meeting at Andrews Air Base in Washington for crucial talks, trade, tariffs, technology, all high on the agenda. The US and China have spent months trying to steady what's been a turbulent relationship in recent years. And what emerges this week could have huge consequences for businesses around the world. But with tensions still simmering over everything from critical minerals to advanced technology, can... they find common ground. China is investing heavily to build in computing power right now. It needs to compete with the US after all in the AI race. Much of that investment is happening far from China's major cities, in places like Inner Mongolia, where vast new data centres are being built to power the country's ambitions. Our China correspondent Laura Bicker has been there. Speaker 7 (3:02) To build the infrastructure that is desperately needed for AI in Mongolia is key because it has vast amounts of wind and solar resources. And that's why China has chosen to build its AI data centres here at remarkable speed. Buildings have risen out of the farmland in a matter of months, built by construction workers from all over the country. Speaker 1 (3:30) This has been a $75 billion investment. Speaker 7 (3:38) It Speaker 1 (3:39) doesn't do much good for us locals. They need educated people. They don't need that many workers. For me, I can only do some hard manual labour. Speaker 7 (3:53) This country has fewer data centres than the US for now. But this hub is a way of catching up. If China is going to lead the world in artificial intelligence development, this is where it is building the engine room that will drive that change. Just a few months ago, this corner of Inner Mongolia was farmland. Now, dozens of data centres have sprung up for the likes of Huawei and others. There is no sign that China is slowing down on this technology. There has been little opposition to data centres here, unlike in the West. But there are still some quiet skeptics. Speaker 1 (4:35) If Speaker 7 (4:36) they demolish the village for a data center, it won't be good. I prefer living by the farmland. Speaker 7 (4:44) President Xi has set the direction and will feel that in the long term, China can compete with the US on this technology. His government is focused on securing an AI-powered future, even as some of its people wonder whether they'll be part of it. Speaker 2 (5:02) The BBC's Laura Bicker reporting there from Inner Mongolia. Well, Riva Goujon, who covers China for the consultancy Rhodium Group, told my colleague Luke Wilson a little earlier what she believes each side is wanting from this week's meeting between the two presidents. Speaker 8 (5:18) First on optics, I think Beijing is coming into the summit with a message that the global south is with China and that it rejects U.S. dictated rules, that the world has lost trust in U.S. security guarantees, and that the global south wants Chinese technology to modernize its economies. On the other hand, you have the U.S. on the optics side trying to shape a narrative that, no, the world is with the United States. in arguing that China's trade imbalances that it's imposing on the world is de-industrializing the world's most advanced economies and this has to stop. Fundamentally, when these two leaders meet, there's not a whole lot of substance coming out of the summit itself. I see it more as a test of guardrails. And Speaker 1 (6:07) we've heard both. countries talking about AI a lot recently. The bosses of companies like Anthropic calling for guardrails and regulation, putting that in the spotlight. They are the two biggest AI players. Could we see anything like cooperation or a way forward on that, do you think? Speaker 8 (6:26) I think the summit here is really about saying, look, we need to talk. We need to set up a regular mechanism to talk. But there's still a lot of distrust between the two sides on the AI dialogue, where China perceives the U.S. calling for guardrails and restraint as just another example of the U.S. trying to technologically contain China. The U.S. has an interest in getting China to slow its deployment of open source models. Both of these countries want to avoid cyber anarchy. Speaker 2 (6:58) China analyst Reva Goujon. Well, Dr. Henry Wang is the founder and president of the Center for China and Globalization. It's a leading non-governmental think tank in Beijing. He's also a former state councillor to the government there. I asked him whether this week's meeting was, as argued by Reva Goujon, just about cementing a truce, really, in the US-China trade war. Speaker 3 (7:21) I think they have a lot of practical things to do. First of all, they meet. That's very significant and shows how this top-down approach is necessary to really calm down the relations. Second, I think they already agreed on quite a few things. Like, for example, they will talk about this, the Board of Trade and the Board of Investment. And they already said each side will, last time in Beijing, they mentioned they're going to get rid of tariff