This week, Donald Trump will be in China. For those who have followed the relationship between the world’s two largest economies for years, that statement carries weight far beyond diplomatic protocol. Trump travels to Beijing from tomorrow until May 15 to meet with Xi Jinping amidst a trade war that has been escalating for years and technological tensions that have forced companies worldwide to take sides. More than a courtesy visit, it is a negotiation with real consequences for markets and for any company that operates with dollars anywhere in the world.
What is on the table in Beijing is the continuation of a confrontation that Trump himself warned was inevitable during his first term. At that time, he imposed tariffs on specific sectors of the Chinese economy and sanctioned companies he considered a threat to U.S. technological security. China responded with measures that at the time seemed moderate, almost symbolic, but which were actually the first move in a longer strategy: building its own regulatory frameworks, creating export control lists, and preparing for a confrontation that both sides knew would escalate. That moment is now, and Trump knows it better than anyone.
The world is watching this meeting with a mixture of anticipation and nervousness, which the markets are translating into volatility. Some hope the meeting will ease tensions and offer some certainty to an international economy that has been operating for months with too many unresolved variables. Others believe both leaders are arriving in Beijing with gritted teeth, ready to agree to a truce that neither intends to honor beyond what is convenient.
My interpretation, from the perspective of someone making decisions with their own money on the table, is that Trump is coming to this meeting from a position of strength, and that changes the nature of what he can demand. Trump isn’t flying to Beijing to make friends; he’s flying to make it clear who has more to offer and more to take away.
The United States is attending these negotiations with tools that China cannot replicate with the same speed or depth. Access to the US market remains the most coveted asset in the international trading system, and no economy on the planet has yet found a way to do without it without severe consequences. China exports more to the American market than it imports from it, and this asymmetry gives Washington leverage that Trump has shown himself willing to use without hesitation.
On the technological front, the American advantage is even clearer. Restrictions on the export of advanced semiconductors have dealt a blow to the development of China’s artificial intelligence industry with a force that Beijing did not fully anticipate. China has responded with massive investments in its own capabilities, but the technological gap that these restrictions have created will take years to close, if it ever does. Trump arrives in the Asian capital knowing that this is his most powerful argument, and Xi Jinping arrives knowing exactly the same.
For businesspeople who operate in markets that depend on the outcome of this meeting, the practical question is simple: what scenario should we prepare for? My answer is that the truce, if it comes, will be tactical and temporary, and that the supply chains that still depend on China in strategic sectors have a window of opportunity that is closing.
The United States has spent years building the conditions for that dependence to decrease, and Trump is not going to manage the process on his own terms.
