The Xi-Trump Meeting: What's on the Agenda

Coming at a time of heightened geopolitical tension, the summit will hopefully serve as a barometer of whether the world’s two largest powers can stabilise their increasingly fraught relationship- or whether strategic rivalry will deepen further.

Originally planned for late March, the meeting was postponed amid the escalating  conflict with Iran, a development that now looms large over the diplomatic agenda. That war has not only diverted Washington’s strategic attention but also altered the leverage between the two leaders. Beijing enters the talks with a degree of confidence, having demonstrated during last year’s tariff standoff that it can exert pressure on key US industries, particularly through its dominance in rare earth supply chains. Mr Trump goes into the Beijing meeting bogged down in a war he started, and with no obvious strategy to end it. His choices today appear limited : Convince Iran to open the Straits of Hormuz, pull out of the region altogether, or invade Iran and take over the country. None of the available scenarios seem appealing, as Xi Jinping well understands.

The Iran conflict has also underscored American dependence on Chinese-controlled critical materials. Gallium, for example - a metal used in advanced electronics and military systems- is overwhelmingly produced in China. As Washington seeks to replenish its depleted munitions stockpiles, its reliance on such imports has become more serious. This disadvantage gives Xi some additional leverage in discussions that will cover a great deal more than just trade, with Trump in a much weaker position that he was during his last visit – this time he needs China’s help.

The Trump administration has been keen to project strength in global affairs, yet the drawn-out Middle East conflict has complicated that narrative. US allies, particularly in Europe and parts of Asia, have criticised what they perceive as a unilateral and destabilising approach to the Iran crisis. Trump’s negotiating stance has changed several times, and the entire debacle still sits outside the control of the US Congress.

Against this backdrop, Trump may attempt to use the Beijing meeting to assert his diplomatic leadership and demonstrate that Washington remains capable of managing great power relations. Or he might just be hoping for a couple of good selfies with Xi and a gold-tinted dinner in Beijing’s Forbidden City.

But is China willing to play a constructive role in de-escalating tensions with Iran? Certainly that will be Trump’s gameplan in concluding the conflict. Beijing maintains close ties with Tehran and has supported mediation efforts involving regional actors such as Pakistan, and Iran’s Foreign Minister Abbas Araghchi met his Chinese counterpart Wang Yi in Beijing only last week. Despite this relationship, China has so far seemed impotent in actually assisting Iran, or finding a way to get the oil and gas flowing again through the Straits of Hormuz.

China buys the vast majority of its imported oil from Iran, and Tehran spends significant amounts on Chinese goods and services. In 2021 the two countries signed 25-year strategic partnership agreement which covers trade and security cooperation.

While China has a clear economic interest in stabilising the region-particularly given the disruption to energy flows through the Strait of Hormuz- it’s not clear whether Xi will play ball with Trump’s attempt to portray the US as in control and united, let alone in a position to dictate terms.  The US continues to impose secondary sanctions on Chinese firms engaged in trade with Iran, and that will be another bone of considerable contention.

Both sides are expected to also revisit the fragile tariff truce reached last year in South Korea, and while that agreement helped avert further escalation, it did little to address the tensions beneath the economic relationship. Trump is likely to press for increased Chinese purchases of American goods, seeking to reduce the bilateral trade imbalance. Xi, in turn, will be focused on securing an end to US restrictions on technology transfers, particularly those affecting China’s access to semiconductor manufacturing equipment.

Just whether anything of substance emerges is in question, but the outcome of these negotiations could carry significant implications for global markets, including in New Zealand. As a trade-dependent economy with strong ties to both China and the United States, New Zealand has a vested interest in the stability of the international trading system. Any renewed escalation in tariffs or export controls could disrupt supply chains and depress global demand, with the usual knock-on effects for New Zealand’s key export sectors, from dairy to technology services.

Beyond economics, the issue of Taiwan will of course be on the agenda. Trump returned to office with a pledge to end ongoing conflicts and prevent new ones, but progress on that front has been very patchy. Xi may seek to leverage this ambition by framing the Taiwan issue as an opportunity for Trump to secure a legacy of peace in Asia. Specifically, Beijing could push for a shift in US rhetoric, to an explicit opposition to Taiwanese independence.

In early 2025, the U.S. government removed language explicitly stating "we do not support Taiwan independence" from official documentation, advocating instead for a peaceful, coercion-free resolution.

Such a change, while seemingly semantic, does have strategic implications. US allies in the Indo-Pacific, including Japan and Australia, are likely to view any weakening of Washington’s stance as a sign of diminished commitment to regional security. For New Zealand, which has always tried to balance its economic relationship with China against its security partnerships with Western allies, this could further complicate foreign policy positions as we slide into an NZ election campaign.

Asia Media Centre