By Collins Chong Yew Keat

KUALA LUMPUR, Malaysia: The concluded Trump-Xi summit is fundamentally different from the last meet taking place in China during President Trump’s first term, or even during the most recent face-to-face encounter last October in Busan.

This meeting is taking place at a moment when several major fault lines in the global order are converging at once: the Iran war, Taiwan, trade tensions, rare earths, artificial intelligence, semiconductor controls, energy security and the future balance of power in the Indo-Pacific, and both will want to maintain both clarity and a managed ties in the years ahead, while also maximising leverage and cards.

As expected, no substantial deal with high consequence was reached, as the focus was overwhelmingly on setting stabilising factors, maintaining personal diplomacy and in boosting trade and tech returns, all while testing one another’s limits on this managed relationship and to check on options to ultimate sensitive factors especially Taiwan.

Their previous encounter was largely about managing competition within a controlled diplomatic framework, seeking stabilisation. Now, it is about crisis bargaining.

For Trump, the summit is a chance to secure visible outcomes and to negotiate from a point of strength, to extract concessions, and maintaining power supremacy while also giving openings for Beijing to reset ties that benefit both. He needs deliverables on trade, supply chains, energy stability and possibly Chinese pressure on Tehran.

Taiwan as the Ultimate Red Line

China's President Xi Jinping has used the meeting with Trump to send a carefully veiled but unmistakable warning: that the U.S. may pursue trade deals, technological bargaining, tariff resets and others, but it must not cross Beijing’s core red line on Taiwan. His message was that stability is available, but only on terms that respect Beijing’s definition of sovereignty, national rejuvenation and historical destiny.

This explains why Xi’s reference to the Thucydides Trap was not just random, but a strategic device. By invoking the theory that conflict can emerge when a rising power confronts an established power, Xi was framing the US-China rivalry as a historical test and also to push the obligation to manage a peaceful relationship between the two to Washington, to be seen as the party that is expected to first show restraint.

It was to place psychological and political pressure on Trump by suggesting that the danger lies not in China’s rise, but in the U.S. refusal to adjust to it.

The subtext is clear by Xi, that China’s rise is inevitable, China’s position in the world is irreversible, and any U.S. attempt to block China over Taiwan, technology, trade or regional influence would only confirm Washington’s inability to accept a changed world order. This sums up the whole narrative and intent of the summit, although great care is in place to shape a positive tone for both sides.

Xi’s message was calibrated, a classic Xi approach: offer coexistence, but no compromise for China’s core interests; offer stability, but not subordination to the U.S., and in the end, still preserving the Chinese interests and power advantage.

Taiwan remained the most sensitive unresolved issue. For Beijing, Taiwan is the core political test of whether Washington is serious about stabilising relations. For Washington, any visible concession on Taiwan would alarm Taipei, Tokyo, Seoul, Manila, Canberra and the U.S. Congress, and President Trump is well aware that this is the greatest card that he can yield in determining the outcome of ties with Beijing and also with other allies in the region, and he would not want to squander it.

There is the quiet fear that the Trump administration might concede more to Beijing on Taiwan’s security and deterrence, giving in to Beijing card of using this as a ultimate pressure point as an exchange for deeper roles in reining in Tehran, Pyongyang and even Moscow, and for greater trade and rare earths benefit to the U.S.

Xi is seen to be likely to link Iran, directly or indirectly, to Taiwan, not by demanding an open US reversal which is deemed to be unlikely, but by pushing for gradual erosion through slower arms deliveries, softer US language, and fewer public commitments and a perception that Taiwan is negotiable.

The real risk therefore is not an open abandonment of Taiwan, but a quieter trade-off that might weaken US credibility and alarms allies across the Indo-Pacific.

The trade-off may not appear as stark, and may appear as vague diplomatic wordings, delayed arms packages or avoiding strong public statements on Taiwan in order to preserve Chinese cooperation on Iran, trade or energy stability. This is what is feared by Taipei and other U.S. allies in the region.

In great power diplomacy and conventional international statecraft, the most important concessions are not always announced openly but are sometimes embedded in tone, sequencing and omission.

For Taiwan, the fear is not just abandonment but a gradual dilution. If Washington starts treating Taiwan as one bargaining chip, the fear is that it will give Beijing the win and the impression that the pressure tactic works.

It will shape how allies and partners interpret American resolve. It will shape how China calculates future pressure against Taiwan. It will shape whether middle powers see the United States as a consistent strategic anchor or as a transactional actor willing to adjust commitments for short-term gains.

It is therefore true to Trump style of strategic ambiguity and maintaining his cards and leverage over Taiwan by refusing to commit to anything or to answer Xi’s questions to him directly whether he will be taking any actions on Taiwan. This stance alone is enough to sum up the entire summit and the visit in Beijing, that as much as Trump is being seen to be full of praises for Xi and being accommodating and even being labelled as cosying up to the host, he is fully aware of the tone, the subtle messages and the still firm narrative that he holds that Washington will still build bridges and openings for a more managed relations, but not at the expense of Washington’s core interests or in weakening Trump’s cards.

Iran as Beijing’s Strategic Leverage

This puts Iran as one of the main features in the talks. China is highly exposed to any disruption in the Strait of Hormuz, through which almost half of its energy imports passes. Beijing therefore has a strong interest in de-escalation, but it also knows that Washington may need Chinese cooperation to achieve that.

This gives Xi leverage, although not absolute leverage.

Yet China is unlikely to act as an U.S. proxy or to be seen to kowtow to Washington’s demands with ease. Beijing’s goal is to prevent escalation that threatens energy security in West Asia, and while about it, to seek ways to capitalise on this leverage.

Beijing will present itself in the narrative of being the responsible power advocating de-escalation, yet Xi also faces constraints. China certainly does not want an escalation that endangers energy flows which it depended on. It also does not want a collapse in global markets and to inherit responsibility for Iran’s behaviour.

Trump’s message to Xi will be direct: Beijing cannot enjoy the benefits of Gulf energy flows, global trade stability and great-power status while also serving as the principal economic lifeline for Tehran, and using this as a leverage in dictating new power games with the world or with the US.

China buys more than 80 percent of Iran’s shipped oil. In 2025, China purchased an average of 1.38 million barrels per day of Iranian oil, amounting to around 13.4 percent of China’s seaborne oil imports.

It is hence the largest economic absorber of Iranian oil and being Iran’s main lifeline, and China gives Iran breathing space. Without Chinese demand, Iran’s sanctions-hit oil economy would face far greater pressure.

China’s calculation is strategic. Iran helps Beijing in three ways.

First, Iran diverts U.S. military and diplomatic bandwidth away from the Indo-Pacific. Second, Iran strengthens China’s image as an alternative diplomatic pole. Beijing can present itself as a mediator, a voice for the Global South, and a critic of U.S. military coercion.

Third, Iran gives China bargaining leverage. If Trump needs Xi’s help to stabilise Hormuz and pressure Tehran, Xi can extract value elsewhere - on tariffs, export controls, sanctioned Chinese firms or Taiwan-related language.

For Trump, the challenge is to prevent China from turning American needs into strategic concession, and to draw from this negotiating prowess to exert as much concessions and returns as possible. He can seek Chinese help on Iran, but he’s aware that he will not allow Beijing to define the cost involved. 

Although he can pursue trade stabilisation, he is aware that he must not weaken U.S. long-term technological edge or to come at a cost to U.S. taxpayers or farmers or technologists. He can reduce crisis risk, but he must not send a signal that Taiwan is negotiable.

Yet despite this, the United States under Trump still holds the stronger cards. Washington retains unmatched leverage in finance weight, technology, semiconductors, military alliances, market access, energy security, dollar dominance and Indo-Pacific security architecture.

U.S. Holds Stronger Cards

First, the US still controls the most powerful sanctions architecture in the world, and having the capacity to sustain them. Iran’s access to global finance, energy markets and payment systems remains heavily shaped by U.S. pressure.

This matters for China because most of Chinese firms, banks, and shippers are still exposed to the dollar system and to global markets. The fear of losing access to dollar clearing, Western markets, and advanced technology remains a real concern. 

Trump thus has a capable instrument of leverage: where if China refuses to restrain Iran, Washington can expand enforcement against Chinese entities involved in Iranian oil, banking, shipping or supply chains.

Second, the U.S. is still unmatched militarily in the Gulf. Beijing benefits from maritime stability in the Gulf, but has not replaced the U.S. as the main hard-security provider.

China is hence deeply exposed to a crisis it does not fully control.

Third, Washington holds the stronger advantage in the US-China trade relationship as China still depends heavily on access to the U.S. consumer market, being the largest in the world.

The deficit gives Trump political justification to maintain tariff pressure and to ensure that Beijing is playing its part to reset the deficit. China may be a manufacturing superpower, but its model remains vulnerable to external demand (the U.S. market being the main factor), especially when domestic consumption is weak, the property sector remains pressured, and industrial overcapacity continues to push Chinese firms outward.

Fourth, the U.S. continues to maintain the edge in key critical advanced technologies. While China has over the years made major gains in manufacturing, electric vehicles, batteries and shipbuilding, among others, it continues to face constraints in high-end semiconductors, chipmaking equipment, advanced AI infrastructure and other sectors facing U.S. restrictions.

Fifth, the dollar remains the core currency of global finance. This financial structure gives Washington reach that China cannot easily match.

The visit did not erase the economic-security logic that now defines U.S.-China rivalry, nor managed to reduce the persistent tensions, mutual suspicions and wariness from both sides.

This is still in a managed rivalry phase, not reconciliation. The visit bought time; it did not resolve the contest at all.

*Collins Chong Yew Keat is a foreign affairs and strategy analyst and author in University of Malaya.*