China holds upper hand over U.S.

Trade is the obvious headline here. But this summit is really about leverage — who can make the other side hurt first, and who can offer relief on terms they control. That is why so many analysts think China goes into this week’s Trump-Xi meeting with the stronger hand. The meeting is expected in Beijing on May 14, and the backdrop is ugly: tariff mistrust, Taiwan tension, and a new Middle East shock tied to Iran and the Strait of Hormuz. ### Why do people say China has the upper hand? Because the U.S. still depends on Chinese choke points more than Washington would like to admit. The big one is critical minerals — especially rare earth processing, where China remains the dominant player. That matters because these materials sit inside magnets, electronics, autos, aerospace systems, and defense supply chains. If Beijing tightens access or slows licenses, the pain shows up fast outside China. (cfr.org) ### Why do rare earths matter so much? Rare earths sound niche, but they are more like the tiny valves inside a giant machine. Most people never think about them until the machine stops. China’s export restrictions over the last year turned that abstract dependence into a live policy weapon, and even temporary easing has not changed the basic fact that the U.S. is still far behind in processing capacity. (cfr.org) ### What does Trump actually want? He appears to want visible wins — tariff relief, supply-chain stability, and maybe some headline-friendly commitments he can sell as proof that direct leader-to-leader diplomacy works. But the catch is that Beijing does not need to hand over a sweeping deal. It can offer narrow, reversible concessions and still come out looking responsible while preserving its structural advantages. That is a big reason CFR’s roundup framed the summit as a chance for China to “manage” Washington rather than capitulate to it. (europarl.europa.eu) ### Why does Iran change the equation? Because the summit is no longer just about bilateral trade. If the Iran war threatens shipping through Hormuz, energy flows become part of the bargaining environment. China has deeper ties to Iranian oil and a larger interest in keeping regional disruption from spiraling. That gives Beijing another lane of relevance — not just as America’s rival, but as a power Washington may need to talk to if it wants broader stability. (cfr.org) ### Where does Taiwan fit in? Taiwan is the permanent spoiler. Even if both sides want a calmer trade channel, the military and political distrust around Taiwan limits how far any thaw can go. So the summit is happening under a ceiling — there may be tactical cooperation, but not real strategic trust. That makes every concession narrower and more conditional. (theguardian.com) ### Does that mean the U.S. has no leverage? Not quite. The U.S. still has tariff tools, export controls, alliance networks, and the power to make life harder for Chinese firms. But those are mostly coercive tools. China’s advantage right now is that it controls several things the rest of the world still needs badly, and it can calibrate access without blowing up the whole relationship. That is a more flexible kind of leverage. (channelnewsasia.com) ### So what is the realistic outcome? Probably not a grand bargain. More likely, both sides try to lower the temperature, protect a few priority channels, and avoid adding a fresh crisis to an already unstable year. If that happens, Beijing can claim it acted from strength, and Trump can claim he kept talks alive. But those are not the same thing as solving the underlying contest. (cfr.org) ### Bottom line China’s edge is not magic. It is structural. Until the U.S. reduces its dependence on Chinese mineral processing and crisis-linked supply chains, summit theater will keep running into the same hard limit. (cfr.org 1) (cfr.org 2)