Trump-Xi summit: U.S. alliance tensions complicate China strategy

President Donald Trump has spent years squeezing China, imposing tariffs, cutting off access to advanced technology and pressuring US allies to reduce their dependence on China. When he begins talks with Chinese President Xi Jinping on Wednesday, he will juxtapose years of hoopla with the pomp and atmosphere with which the leaders lavish each other.

And the two-day handshake comes as President Trump confronts China, which is proving more difficult to isolate and whose allies are reluctant to line up behind the United States.

Some of this is the work of the Chinese government. China has cultivated its own influence, particularly through rare earths, while deepening trade ties around the world. The world trade surplus has remained at a pace of over $1 trillion for the second consecutive year, reaching a record high of $1.2 trillion in 2025, despite a decline in exports to the United States.

But the change also reflects President Trump’s approach. Since returning to office, disputes over tariffs, defense spending and personal disputes have strained relations with the traditional ally, even as Trump has pursued a more transactional relationship with Xi.

Countries that the U.S. government has traditionally counted on to expand its power are increasingly seeking room to maneuver between the world’s two largest economies.

As a result, President Trump heads into Thursday’s summit facing a test of whether tensions with U.S. allies make it difficult to marshal American power against Mr. Xi.

“China is presenting itself to the world as a stable counterweight to the erratic and violent United States,” said Ryan Hass, director of the John L. Thornton China Center, a think tank at the Brookings Institution. “America remains an unparalleled force on the world stage, but that power requires a united front, and fewer countries are now willing to follow America’s lead.”

For decades, one of the United States’ greatest advantages over China has been its network of allies and partners. When the United States restricts technology or imposes sanctions, bringing in major economies in Europe and Asia makes it harder for Beijing to circumvent such measures.

China still lacks anything comparable. The Lowy Institute, an independent foreign policy think tank in Australia, scored the US defense network in 2025 at 81.4 out of 100, compared to 18.9 for China. But Beijing does not need U.S. allies to defect in order to undermine its advantage. It’s enough that they become less willing to cooperate with Washington, Hass and other China experts say.

“When democracies don’t have public support for the other country, it increases the cost for leaders to align themselves with the United States,” Hass told CNBC. “It would lower the cost for leaders to rebel against the United States.”

President Trump has taken a tough stance on relations with allies. He has clashed with NATO over defense spending and threatened to reduce the U.S. military presence in much of Europe, while on Tuesday he threatened to seize Greenland and announced plans to add to it after imposing tariffs on the U.S.’s northern neighbor Canada.

“The biggest economic grievances about China’s economy are shared by many of our allies and partners, but the current U.S. approach is to attack them all rather than form a common front,” said Melanie Hart, senior director of the Atlantic Council’s Global China Hub.

Meanwhile, public confidence in the United States as a reliable partner is declining. The Pew Research Center announced in June that the percentage of Canadians who said the U.S. is a trusted partner has fallen from 83% in 2022 to 35% this year. In Germany, 23% say the United States considers the interests of other countries when making foreign policy decisions, down from 60% in 2023.

Canada was invited this month to become the European Union’s first “associate member” as Prime Minister Mark Carney’s government seeks to deepen defense ties with Europe and reduce dependence on the United States.

Hart told CNBC that foreign allies are “worried that as soon as they make a deal with us, the U.S. government is going to undermine them in some way and come to regret it.”

China is trying to take advantage of the gap, not necessarily by persuading countries to choose Beijing over Washington, but by making the choice less binary.

India provides an example.

The country remains a security partner of the United States and a strategic competitor of China, and both countries’ militaries remain deployed along the disputed Himalayan border. But Xi visited India this month for the first time in seven years, taking what Tanvi Madan, a senior fellow at Brookings University, called “baby steps” toward stabilizing relations between the two countries.

Bilateral trade will reach a record $155.6 billion in 2025, according to Chinese data, and Mr Xi and Indian Prime Minister Narendra Modi agreed to strengthen business and transport links despite unresolved security disputes.

“The uncertainty surrounding President Trump’s approach to China and India’s own strained relationship with the United States has given India new reason to keep its relationship with China on a more stable footing,” Madan told CNBC. “Even tactical de-escalation between the US, India and China could have downstream effects on India’s strategic environment.

Changes in the balance of leverage are most evident in economic relationships.

While President Trump’s tariffs targeted China’s dependence on U.S. buyers, U.S. export controls targeted a deeper dependency: the advanced chips and manufacturing equipment China needs to compete on the technological frontier.

Those pressure points remain. However, the Chinese government has developed its own influence. Last year, China placed seven rare earth elements under export controls, forcing companies to seek government approval to ship them overseas. According to the U.S. Geological Survey, China will control about 70% of the world’s rare earth mining and more than 87% of its refining and production by 2024.

immediately, ford A lack of magnets has halted Explorer production in Chicago for a week, while auto suppliers in Japan and Europe have shut down production lines to wait for materials.

The United States suddenly faced a vulnerability it had spent years building for China: a dependence on what the other side could withhold.

“One of China’s main objectives ahead of these talks is to contain the United States diplomatically and limit the Trump administration’s reach,” Hart said, citing critical minerals as one of the tools China used.

That vulnerability now hangs over Thursday’s summit. The current trade ceasefire expires on November 10th. Rare earths were again on the agenda at a weekend meeting between Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng.

But President Trump still has cards to play.

The United States and its allies control key parts of the advanced semiconductor ecosystem, and U.S. regulations limit access to China’s most sophisticated chips and manufacturing equipment. President Trump also authorized limited sales. Nvidia’s Access to semiconductors has become a new negotiating point, with H200 AI chips being exported to China even though broader regulations remain in place.

This negotiation dynamic is beginning to extend beyond trade.

A $14 billion arms package by the United States to Taiwan has been awaiting President Trump’s approval for months. After meeting with Xi in Beijing in May, Trump said he was holding off on the package, calling it a “very good bargaining chip.”

There are few issues that carry greater risks for the Chinese government. China claims Taiwan as its own sovereign territory and has never renounced the use of force to achieve reunification. During their May meeting, Mr. Xi also pressed President Trump on U.S. arms sales and Taiwan.

Delays in the arms deal have raised concerns among U.S. allies in Asia that Mr. Trump could soften Washington’s position on Taiwan in exchange for economic concessions from Mr. Xi.

But Hart said the Chinese government’s objectives go beyond one weapons package.

Hart said he believes President Trump needs to rein in U.S. support for Taiwan. “I think their larger strategy is to make President Trump feel like there’s a deal in the works with Xi Jinping.” “When it comes to the $14 billion arms deal, they’ve clearly established themselves there.”

Iran is testing the opposite: whether China can turn the relationship Washington lacks into geopolitical influence.

The United States has spent decades trying to isolate Tehran, while Beijing maintains economic and diplomatic ties and frequently purchases Iranian oil. Mr. Xi offered to help mediate the dispute. But neither Washington nor Tehran appears to be considering an immediate withdrawal, limiting what Beijing can accomplish in the short term.

“This time around, especially with relations with Iran, but also with some other global issues, there’s really no real coalition of countries interested in partnering with the United States to take care of business in Iran,” Hass said. “This is part of the way President Trump operates. He doesn’t think so much in terms of coalitions. He thinks in terms of power.”