Trump-Xi summit: Don’t be fooled, this was more than panda diplomacy
Yes there was one panda involved, but eight-ninths of the real outcomes of this meeting are hidden from sight, writes Tim Hames
Business leaders watching the summit meetings between Donald Trump and Xi Jinping last week may have felt disappointed. There was little of substance bar the declaration that giant pandas would be returning to a zoo in Atlanta, Georgia. Ceremony and symbolism seemed to reign supreme, with little steer on whether or how the two largest economies in the world could agree to closer collaboration.
Any downbeat sentiment would be mistaken for three main reasons. First, state visits come with ceremony and symbolism, but neither are inconsequential. They assist the creation of a political mood music. Mr Trump’s decision to roll out the red carpet for Mr Xi will not have been universally applauded by many in the Republican Party (including the vice president, secretary of state and secretary of defence, who are all more sceptical about Beijing than the President). Beijing will appreciate this.
Second, summits such as this are iceberg occasions where about eight-ninths of what is happening is hidden. The serious action occurred in meetings away from the White House. The critical player here is Scott Bessent, the US treasury secretary, who like his boss is more pragmatic and less ideological than others in the administration. The agreement to extend the existing trade truce until at least January 10th next year is worth noting closely.
Finally, 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 will be working deliberations rather than carefully staged events involving marching bands and state dinners with a bewildering collection of cutlery to be deployed. If there is to be a Trump-Xi bargain, it will emerge from these two conversations which occur after the US mid-term elections on November 3rd.
What should business anticipate? Two public and one private understanding.
What should business expect?
There is a strong chance of a more permanent arrangement on trade and tariffs. Early in the second Trump tenure (April 2025), the economic dispute lurched dangerously close to a complete loss of control. The US hiked tariffs on most Chinese goods to an eye-watering 145 per cent, and China responded with a 125 per cent rate on American exports. At that stratospheric level, trade between the two nations would be all but impossible. The truce reduced US tariffs down to between 26.5 per cent and 30 per cent. A final settlement will keep those numbers where they are, nudge figures down slightly or reintroduce a structure where small imports from China ($1,000 or less) are outside the tariff system altogether. Any accord of this type would be a force for stability.
There is also likely to be movement on information sharing around artificial intelligence (AI) developments. While the US and China are often described as being in an AI “race”, they are actually competing in different events. The US is determined that one of its tech giants will secure artificial general intelligence (or “super intelligence”) first. China is more focused on the practical implementation of AI across its economy at high speed due to demographic challenges. There is wiggle room here for both sides to avoid an accidental AI calamity.
The agreement that will not speak its name concerns Iran. 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.
The deal is there to be done. It will make a real difference to international commerce. By then, it will be plain that giant pandas were not the only output of this summit.
Tim Hames is a senior adviser to Treble Peak