The Trump-Xi summit on September 24 will test whether America's AI chip export controls can survive China's growing ability to build domestic alternatives, while Beijing's dominance of rare earth processing gives it immediate bargaining power that Washington cannot quickly replace. The meeting comes as both nations navigate a fragile trade truce that expires in November, with technology restrictions among the most consequential cards each side can play.

What Leverage Does Each Side Actually Hold in Tech Negotiations?

When Donald Trump and Xi Jinping sit down, they arrive with asymmetric but equally potent advantages. Trump can restrict China's access to advanced semiconductors and the technology needed to manufacture them. Xi can retaliate through China's control over critical minerals and its ability to build around American restrictions.

The relationship between the two powers resembles a carefully balanced standoff rather than a clear hierarchy. A previous trade truce was reached in October 2025 in Busan, where both sides agreed to reduce tariffs and export restrictions. China suspended expanded rare-earth controls and committed to measures against fentanyl precursor chemicals. A May 2026 meeting in Beijing produced another round of commitments, including Chinese purchases of American agricultural products and 200 Boeing aircraft. However, progress since then has been mixed, with Chinese farm purchases falling short of promised levels and the Boeing commitment yet to fully materialize.

How Do Rare Earths Give China Disproportionate Bargaining Power?

If trade tariffs are Trump's broadest economic weapon, rare earths may be Xi's sharpest tool. China controls up to 70 percent of global rare-earth mining and more than 85 percent of refining and production, according to recent reporting. This dominance extends far beyond the ore actually mined within China, giving Beijing influence over supply chains for electric vehicles, electronics, renewable-energy equipment, and defense systems.

The timing amplifies this leverage. China's suspension of expanded rare-earth export controls is tied to the broader trade truce due for review in November. Recent Chinese shipments of rare-earth magnets to the United States have already fallen, according to customs data, adding to concerns about supply security. The United States and its allies are attempting to build alternative mines, processing facilities, and supply chains, but diversification takes years. China does not necessarily need to shut exports completely to exercise leverage; delays, licensing requirements, and uncertainty alone can force companies to rethink their supply chains.

This imbalance creates a fundamental problem for American negotiators. Trump can promise that America will become less dependent on China, but Xi can influence a supply chain that American manufacturers need today.

What Is China's Strategy for Countering US Chip Export Controls?

The United States still maintains major advantages in advanced chip design, leading artificial intelligence (AI) companies, and access to the most sophisticated semiconductor ecosystem. However, the relationship has become more complicated as Washington has shown its chip controls are not absolute. The US has allowed some Nvidia H200 chips to be sold to Chinese customers under conditions, while Beijing has simultaneously pushed Chinese companies toward domestic alternatives.

China's counter-strategy centers on building around restrictions rather than capitulating to them. Huawei has been expanding its Ascend AI-chip ecosystem, while Chinese technology companies are investing heavily in domestic hardware and software. The more capable those alternatives become, the less effective American export controls become as a long-term instrument of pressure. This does not mean China has erased America's technological advantage, but it has narrowed the gap in ways that matter for negotiations.

How to Understand the Real Stakes of the Summit

• Trade Truce Expiration: The current arrangement between the US and China is set to expire in November, creating a natural point at which tariffs and other restrictions could be revisited or escalated.
• Rare Earth Supply Security: American manufacturers depend on Chinese rare-earth processing today, even as the US attempts to build alternative supply chains over years, not months.
• Domestic Chinese Alternatives: As Chinese companies develop their own AI chips and semiconductor ecosystems, American export controls lose effectiveness as a long-term negotiating tool.
• Economic Pressure on Both Sides: China faces weak domestic demand and a prolonged property downturn while targeting 4.5 to 5 percent growth in 2026, giving Xi incentive to prevent another tariff shock.
• Implementation Gaps: Previous commitments from May 2026 have not been fully realized, suggesting that agreements alone do not guarantee compliance or resolve underlying disputes.

The historical precedent for this summit is instructive. When Richard Nixon traveled to Beijing in 1972, Washington and Beijing were formally estranged after more than two decades of hostility. Yet both had strategic reasons to talk. The resulting Shanghai Communiqué did not erase disagreements, particularly over Taiwan, but created a framework for managing them. Seven years later, Washington and Beijing established formal diplomatic relations.

Today's summit operates under similar logic. The question is not who is stronger overall, but who has the better cards on the issues that matter most. Trump's tariff threats and chip restrictions face a China that has demonstrated resilience and the ability to absorb considerable pressure without capitulating. Xi's rare-earth leverage faces an America determined to build alternatives, though that process will take time. Neither side holds absolute advantage, which is precisely why the negotiation matters.

The November deadline looms as the real test. If the current truce expires without renewal, both sides could escalate restrictions simultaneously. Trump could raise tariffs again; Xi could tighten rare-earth controls. The summit on September 24 will reveal whether either side has found new leverage or whether the fragile equilibrium will hold.