Start with trade and supply chains. The US and China have respective chokeholds on semiconductors and rare earth exports which have helped maintain a fragile economic armistice. A formal trade truce, which both sides extended in May, is due to expire on November 10. The underlying imbalances remain largely unresolved: though direct US imports from the People's Republic fell to a 16-year low of $309 billion in 2025, products originating in China are still finding their way stateside. Last month the US accused more than 40 countries of helping Beijing illegally avoid tariffs on some $75 billion in goods annually via transshipment. But having hurriedly walked back their mutual escalation to triple-digit percentage tariffs following last year's "Liberation Day", neither side looks keen to test the other’s mettle.
Trump might be personally open to further rapprochement. The president recently said he would "be OK with it" if Chinese carmakers built vehicles in the US, so long as they hired local workers. In reality his Republican party and American automakers would probably declare betrayal and reiterate calls to lock in a ban on Chinese rivals. For their part, manufacturers from the People's Republic would require ironclad guarantees against the sudden closure of any new factories.
The political risks attached to any deal perceived as easing up on China, coming right before midterm elections where the Democratic Party is already forecast to make big gains, means both sides are likely to seek smaller wins. They could extend the trade truce for another six to twelve months. The US may also lower tariffs on select goods in exchange for bigger Chinese imports of agricultural products, where non-soybean purchases already look set to fall $10 billion short of this year's nominal $17 billion target. Joint boards of US-China trade and investment, which have gone nowhere since their creation in May, might also get spruced up and re-served to the public as warmed-over proof of progress. Such half-measures would deliver low-cost wins for both leaders without either giving up any real leverage.
A similar cautious logic applies to coordination on artificial intelligence. US and Chinese firms have produced the most impressive and dangerous frontier models in existence. Yet the intergovernmental dialogue on AI announced by Beijing after the last summit has been such a nonstarter that US Treasury Secretary Scott Bessent on Sunday said he had proposed another US-China AI dialogue at last-minute preparatory talks in New York with his Chinese counterpart He Lifeng.
Real appetite for placing sensible limits on machine learning seems limited. Trump has shrugged off existential fears over the speed of AI development voiced by Anthropic's Dario Amodei, whose suggestion that any coordinated slowdown might help Chinese rivals was cited in nationalist newspaper Global Times as evidence of an attempt to contain China's rise. In short, neither side seems likely to accept any limitations that might give the other a leg up.
That leaves foreign policy, where the impasse looks equally intractable. Trump is irked by China’s trade ties to Iran but has little leverage to force recognition of American sanctions on Tehran. Xi meanwhile made a point of reiterating China’s position on Taiwan’s sovereignty at the last summit, and the US has since held off on arms sales to Taipei. But giving any more ground would yield no clear benefit to the White House.
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