Where are the flash points in next week's Trump-Xi talks?

Donald Trump is poised to be the first US president visiting China in almost a decade, but an uneasy trade truce and tensions over Iran and Taiwan loom over his trip next week.

All eyes will be on Trump’s talks with Chinese leader Xi Jinping. Analysts said with an advance team already in Beijing, Trump’s travel will likely proceed even without an end to hostilities in the Middle East.

What’s on the agenda for the leaders of the world’s two biggest economies?

‘Board of Trade’

US officials will likely seek Chinese purchases in categories like aircraft, agriculture and energy, said Christopher Padilla of advisory firm Brunswick.

“That’ll be one important deliverable for the US and the other is to set up the ‘Board of Trade’,” added Padilla, a former US commerce and trade official.

The mechanism, as described by US Trade Representative Jamieson Greer, would help formalise and identify what goods the United States should export to and import from China.

This could be a platform for future purchasing agreements in “non-sensitive sectors,” like consumer electronics, Padilla told AFP.

But US firms worry that longstanding issues like expanding market access might be taking a back seat as economic ties shift.

As of a week before the visit, “not a single CEO” had received an invitation, said US-China Business Council president Sean Stein. But there are hints some may eventually join.

Tariff truce

China probably wants an extension of its tariff ceasefire with Trump, Padilla said.

While Washington and Beijing slapped tit-for-tat tariffs on each other’s exports a year ago, Trump and Xi agreed on a year-long trade truce at their October meeting in South Korea.

Conditions have shifted since.

The deal saw Washington maintain some tariffs over China’s alleged role in global fentanyl supply chains and accusations of unfair practices.

But the US Supreme Court in February struck down many of Trump’s duties, including those imposed over drug trafficking.

The Trump administration has opened investigations that could lead to new and more lasting duties.

With Beijing more recently pushing back on US sanctions, Stein noted: “It appears that the truce is not as strong as we were hoping.”

Pressure on Iran

The US-Israel war on Iran overhangs Trump’s visit, which he already postponed once because of the conflict.

Some experts expressed uncertainty on whether the summit would proceed.

But Joerg Wuttke of advisory firm DGA-Albright Stonebridge Group told AFP: “The president would not like to put the Iranians in a position where they can determine if he can travel.”

Padilla expects Trump “would like China to continue pushing Iran to make a deal”.

Both sides will likely discuss China’s oil purchases from Iran, Greer told Bloomberg Television this week.

China is less exposed than other Asian economies to shortages of oil and gas after Tehran’s blockage of the Strait of Hormuz. Nonetheless, it is not immune to economic fallout.

Rare earths

Rare earths — and China’s dominance in the sector — will loom over talks too.

“Trump appears focused on preserving this truce and using the time to build insulation against dependence on China for key inputs,” Ryan Hass of the Brookings Institution said.

Washington has a strong interest in encouraging China to keep exports of rare earths open, Wuttke said, especially as it needs supplies for the development and replenishment of weapons.

China is the world’s biggest producer of rare earths, used in products ranging from consumer electronics to military equipment.

Taiwan question

Xi might try to push for US policy changes on self-governed Taiwan, which China claims as part of its territory.

Trump’s transactional style of diplomacy has raised concerns about his willingness to defend the island from China.

He rattled nerves by suggesting previously that Taiwan should pay the United States for protection.

Wuttke expects Beijing to be a “subtle negotiator” and “cautious not to overplay their cards”.