China enters summit with leverage

Trade talks are only part of this story. The real issue is leverage — who can make the other side pay a price, and who can offer something the other side suddenly needs. Heading into Donald Trump’s May 14–15 summit in Beijing with Xi Jinping, that balance looks less U.S.-tilted than it did even a few months ago. China now comes in with two unusually hard forms of bargaining power: critical minerals and energy diplomacy. ### Why does “leverage” look different this time? The backdrop changed fast. This meeting was originally expected earlier, but the U.S.-Israeli war with Iran and the disruption around the Strait of Hormuz scrambled the agenda and raised the value of any country that could help calm energy markets. China is one of Iran’s most important economic partners, and it has already been pushing publicly for shipping through Hormuz to resume. That gives Beijing a way to present itself not just as a rival, but as a useful broker. (cnbc.com) ### Why do critical minerals matter so much? Because they sit inside the boring but essential parts of modern industry. Rare earths and other critical minerals feed batteries, electronics, defense systems, and advanced manufacturing. The U.S. has spent years talking about reducing dependence on China, but the catch is that China still dominates key parts of the processing chain. In a summit setting, that matters more than rhetoric — Beijing can threaten friction in supply chains that Washington still cannot easily replace. (cfr.org) ### Why is energy suddenly part of a U.S.-China summit? Because the Iran war turned a regional conflict into a global pricing problem. When the Strait of Hormuz is disrupted, oil does not stay a Middle East story for long — it moves into shipping, inflation, and political pressure everywhere else. Trump wants Chinese help in stabilizing that channel, or at least in pressing Tehran. But asking for help creates its own asymmetry: the side asking for assistance is already conceding that the other side has something valuable to trade. (cfr.org) ### Does that mean China controls the whole meeting? Not exactly. The U.S. still has tariffs, export controls, alliance pressure, and military weight in Asia. But summits are not won by having the bigger economy in the abstract. They are shaped by who controls the scarce thing the other side needs right now. At this moment, Beijing can point to minerals, manufacturing depth, and a line into Iran that Washington does not have. That does not make China dominant across the board. (cnbc.com) It does make blunt U.S. demands harder to enforce. ### What issues get tangled together? Pretty much all of them. Trade, Taiwan, AI controls, sanctions, and Gulf security are no longer cleanly separate files. If Washington wants cooperation on Iran or shipping lanes, Beijing can try to link that cooperation to softer pressure elsewhere. CFR analysts are basically arguing that this is the central shift — China can now bundle issues together from a stronger position than before. (cfr.org) ### So what should we watch at the summit? Watch for small deliverables, not grand bargains. If the two sides announce any narrow agreement on supply chains, crisis management, or maritime stability, that will tell you both capitals recognized the new balance. If talks stall, that will also be revealing — it would mean China decided its current leverage is worth preserving rather than cashing in quickly. (cfr.org) ### What’s the bottom line? China is not entering this summit as a supplicant. It is entering as a country that controls chokepoints the U.S. still cares about — and that changes the conversation before the first meeting even starts. (cnbc.com)