With U.S. and Chinese leaders scheduled to meet this week, experts say now is the best time for President Xi Jinping to negotiate. The United States is busy fighting wars in the Middle East, and domestically President Donald Trump’s approval ratings are plummeting. He is desperate for a victory, which could give China an advantage.
Trade between the world’s two largest economies has been disrupted since President Donald Trump returned to office last year and imposed a series of tariffs on the world, with one of the highest tariffs of 145% on China.
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The Chinese government retaliated with its own tariffs, halting exports of rare earth metals, which China has a monopoly on and are essential to a variety of industries, including cars and smartphones.
Although the situation has eased slightly since the peak of the freeze, it is far from normal.
“Trade relations have really, really deteriorated. U.S. imports from China are down more than 25%, and exports to China are down more than 25%. That’s a huge number for one year,” said Chad Bowe, Reginald Jones senior fellow at the Peterson Institute for International Economics (PIIE).
“There doesn’t seem to be any basis for how bad the relationship is.”
One estimate suggests that without President Trump’s trade war, U.S. exports to China would have increased by nearly 60% in 2025 to about $90 billion a year.
According to PIIE’s Bown, U.S. imports from China declined (from a 4% decline in imports to 9% in 2025), and imports from other countries rose 9% as companies adapted to the high tariffs imposed by China and shifted supply chains to other countries such as Mexico, Vietnam and Taiwan.
Dexter Tiff Roberts, a non-resident senior fellow at the Atlantic Council’s Global China Hub, said China’s trade surplus reached a high of nearly $1.2 trillion last year as a decline in trade with the United States was offset by an increase in trade with other parts of the world, indicating that it is “moving away from dependence on the United States.”
Tensions between the two countries have continued even after talks were held in South Korea in late October on the sidelines of the Asia-Pacific Economic Cooperation meeting, and have not eased much since then.
“This is an important trip,” said Wei Liang, a professor at Monterey’s Middlebury Institute of International Studies. “Right now, the situation is chaotic and both sides have lost hope of what can be done bilaterally.”
President Trump’s first visit to China since 2017 arrived in Beijing on Wednesday ahead of talks scheduled for Thursday and Friday.
Experts agree that China has the upper hand.
First, exports have not been hurt. The other is that it has developed a gas pipeline through Central Asia to meet some of its energy needs, and is not involved in wars in countries such as Iran.
“Now is the best time for Mr. Xi to hold these negotiations, as the United States is busy with wars, President Trump has a low reputation domestically, and midterm elections are coming up in November, especially in the United States,” Liang said.
A Reuters/Ipsos poll late last month found that 34% of Americans approve of President Trump’s performance in the White House, down from 36% in the previous Reuters/Ipsos poll in mid-April. Trump’s standing among Americans has been on the decline since taking office in January 2025, with his approval rating at 47%.
Energy prices are soaring due to the U.S. and Israel’s war against Iran and retaliation in the Strait of Hormuz, a key barrier for oil and gas shipments. On Monday, international benchmark Brent crude rose 3% to $104 from Friday’s close after President Trump said the ceasefire with Iran was “on life support.” The impact pushed prices up to an average of $4.48 a gallon on Monday, with some states seeing even more pain, with prices in California at $6.10, Washington at $5.72 and Hawaii at $5.60, according to GasBuddy data.
On Tuesday, U.S. Labor Department data showed consumer inflation rose to 3.8% from a year earlier as the war with Iran boosted energy prices.
“Mr. Xi doesn’t feel any pressure domestically, but Mr. Trump will want to reach an agreement on something so that he can offer a deal domestically…He has a sense of crisis,” Liang said.
Beijing’s needs are not as pressing as the United States, but experts say it knows tariffs and trade tensions are unsustainable and is willing to negotiate, especially while China has the upper hand.
China wants regular access to high-tech chips, or at least the tools to make them, so it can develop its industry and expertise and gain some concessions from Taiwan.
The United States will also seek China’s assistance in reopening the Strait of Hormuz with ally Iran.
“They’re essentially asking China to help with an ocean expedition. It’s amazing that the White House has gone this far,” Roberts of the Atlantic Council told Al Jazeera.
In return, the United States would require China to commit to big purchases, including soybeans, Boeing airliners, and energy supplies such as coal and gas.
“Much of what the United States is trying to accomplish now is undoing the damage that was previously done,” Roberts said. “China is aware of its good fortune and is surprised. They can sit back and let the United States undermine their global standing.”
