CFR says China has upper hand

The story here is leverage — not diplomacy in the abstract, but who walks into a summit with more usable pressure points. Donald Trump is heading to Beijing for a May 13–15 state visit, and the meeting with Xi Jinping on May 14–15 is being framed as a major reset moment. But the real read from the pre-summit analysis is narrower. China does not need a breakthrough nearly as badly as Washington does, and that changes the whole shape of the talks. ### Why does Beijing look stronger? Because China holds cards the U.S. cannot easily replace on short notice. CFR’s argument is blunt: Xi comes in more confident after weathering last year’s tariff escalation and after showing he can use rare earths and magnets as a “break glass” tool. Those materials are not some niche trade item — they sit inside defense systems, EVs, electronics, and industrial supply chains. If Beijing can slow those flows, it can create pain fast without firing a shot. (livemint.com) ### What’s the specific proof of that? The telling detail is last year’s tariff fight. CFR says Trump pushed tariffs past 140%, but Xi responded by threatening restrictions on rare earth and magnet flows in April and October 2025, and Trump backed off rather than escalate further. That matters because it suggests Beijing already tested this leverage once and found it worked. This summit is happening after that lesson, not before it. (cfr.org) ### Why do rare earths matter so much? Because supply chains are sticky. In theory, the U.S. and allies can diversify. In practice, processing capacity, refining know-how, and downstream manufacturing are concentrated enough that switching takes years, not weeks. So even if Washington wants to look tough, Beijing can threaten a choke point that hits factories and procurement plans almost immediately. That is a structural advantage, not a talking point. (cfr.org) ### Where does Iran fit into this? Turns out the Middle East is part of the China story. The summit was delayed after the U.S. and Israeli strikes on Iran, and now the Iran war may dominate the agenda. That helps Xi in two ways. First, it pulls U.S. attention and military bandwidth away from the Indo-Pacific. Second, it raises the value of China’s image as a relatively steady energy buyer and supplier while oil and gas markets stay jumpy around the Strait of Hormuz. (cfr.org) ### Does that mean China wants a big deal? Probably not. The more realistic goal is management. CFR’s broader pre-summit line is that this meeting is about keeping the relationship from getting worse, not solving the deep disputes — China’s economic model, Taiwan, support for Russia and Iran, or the long fight over technology. Low expectations are not a bug here. They are basically the policy. ### So what might each side actually want? (cfr.org) Trump likely wants visible wins he can describe simply — steadier rare-earth flows, headline-friendly purchases, maybe a calmer trade channel. Xi likely wants time, predictability, and fewer shocks while China strengthens its industrial and technological position. That mismatch matters. One side is looking for symbols it can sell. The other is looking for room to maneuver. (cfr.org) ### Why are other countries watching so closely? Because the spillovers are huge. If the summit eases pressure, markets, manufacturers, and allies get breathing room. If it fails, the fallout runs through tariffs, commodity prices, semiconductor controls, Taiwan risk, and business planning from Tokyo to Brussels. Even companies joining the trip seem to be signaling the same thing — engagement itself now counts as progress. (cfr.org) ### Bottom line The catch is that “upper hand” does not mean China gets everything it wants. It means Beijing enters the room less cornered. In a summit designed more to stabilize than transform, that may be the most important advantage of all. (livemint.com)