What's at stake as Trump heads to China for talks with Xi

Amna Nawaz:

The president is traveling halfway around the world for less than two days for that state visit to China. And he's bringing a host of top American executives with him. Talks there are expected to encompass the complex economic and security postures of both nations.

Nick Schifrin is in Beijing for the summit, and he joins me now.

So, Nick, give us a preview. What's at stake here?

Nick Schifrin:

Well, Amna, it's a cliche, but this is the most important bilateral relationship in the world that will help determine everything from the prices we pay to the apps we use to the fate of our alliances.

And this is a summit, frankly, between two men who have centralized decision-making. So as we will talk about all week, there's national security concerns, Iran, of course, whether China will put pressure on Iran. Taiwan. Will President Trump agree to delay an arms sale or even weaken diplomatic language over Taiwan?

But the deliverables, as we call them, from this summit are really expected to focus on trade and investment. And that is a good thing, says Sean Stein, the president of the U.S.-China Business Council, who I spoke to earlier today in Beijing.

Sean Stein, President, U.S.-China Business Council:

When the two presidents talk, good things happen. So we're quite optimistic that the two presidents are going to find a really good landing zone on a lot of different areas.

So, what both countries need more than anything else is, they need stability. And I think having the two presidents talk is going to be an injection of stability that's going to help keep the relationship on an even keel that it needs to be for the next year or even beyond.

Nick Schifrin:

To that point, President Trump will come here with CEOs. That hasn't happened in decades. The U.S. is pushing announcements on boards of trade and investment.

And at the summit or shortly thereafter, we expect the U.S. and China to announce deals over Boeing jets, agriculture, including sales of American beef and pork. And, as we know, President Trump is always looking for that big number when it comes to investments. And so that's what we will be looking for, that number, but also what he gives up or what concessions he may consider in order to get that number.

Amna Nawaz:

Nick, as you have been reporting, both sides have been pressuring each other economically over this past year. Does one side come in with more leverage than the other?

Nick Schifrin:

Well, I think both sides feel like they have more leverage than the other.

The U.S. could always raise tariff rates, which have been reduced. The U.S. has maintained restrictions on semiconductors. And the U.S. believes that Beijing has overplayed its hand when it comes to its own export restrictions.

But the fact is that China has weathered President Trump's tariffs, which have had much less of an economic impact than Beijing feared. Beijing is now much more self-sufficient when it comes to technology, despite those U.S. export controls.

And Beijing has found a real leverage point, and that is rare earths, especially rare earth magnets, which the U.S. and the rest of the world need and China has a near monopoly on. And all of that adds up to an emboldened China, and a rising group of Chinese advisers who are U.S. hawks, says Stein.

Sean Stein:

Just like the United States' system has got pragmatists, it's got China hawks, it's got this whole spectrum of views, I think, on the Chinese side, they have got their America hawks and their pragmatists and all that.

And what it means is, it means that the America hawks' voice is growing louder on the Chinese side. I think the Chinese are feeling much more self-confident now than they were a year ago. I think they're no longer intimidated by tariffs the way they were. And I think that they're feeling more comfortable at their place in the world.

Nick Schifrin:

Now, that said, the U.S. is China's single largest trading partner, and Chinese -- China's economy faces serious headwinds.

So, Amna, the focus here on Beijing, the language that we hear from Chinese officials and also the state nationalist tabloid Global Times, as they put it -- quote -- "They are looking for more stability in a world undergoing turbulence and transformation."

Amna Nawaz:

Nick, the other big question is whether or not we'll see any cooperation on Iran, which is an ally of China's. What do you see?

Nick Schifrin:

Well, earlier today, President Trump said at first that he and Xi would have a long talk about Iran. Then he said that he doesn't need Chinese help on Iran. And then he said that Xi had been -- quote -- "relatively good" about Iran.

Look, the bottom line, Amna, as you say, China is an important ally of Iran. They hosted Iran's foreign minister here in Beijing just last week. China has supported Iran's ballistic missile program and, perhaps most importantly, provided an economic lifeline by buying Iranian oil.

The U.S. has sanctioned small Chinese oil refiners that import that oil. But the U.S. has held back on some sanctions, including sanctioning bigger state-owned oil refineries that import that oil and, crucially, those Chinese banks that facilitate the transfer of Iranian oil to China.

Of course, the U.S. wants Chinese pressure on Iran to reopen the strait and to make a diplomatic deal. But, Amna, the U.S. has been asking China to use that leverage for years. And a senior U.S. official tells me that, yes, while China does suffer a little bit economically because the Strait of Hormuz is closed, it also thinks it benefits from the fact that the U.S. is bogged down in a war in the Middle East.

And so it is unlikely that China is really willing to exert significant pressure on Iran, even despite this summit, Amna.

Amna Nawaz:

All right, that is Nick Schifrin reporting from Beijing. China.

Nick, thank you.

Nick Schifrin:

Thank you.