Chinese president tells US counterpart there are ‘no winners’ in trade war
FINANCIAL TIMES
Xi Jinping has warned Donald Trump that the “Taiwan question” is critical to US-China relations, adding that it could lead to “conflict” if badly managed, as the two leaders opened a high-stakes summit in Beijing.
Xi also praised progress in trade talks between the two sides and said there would be “no winners” in a tariff war as he welcomed Trump for the first visit by a US president to China in nine years.
Speaking during a two-hour bilateral meeting at the Great Hall of the People on Thursday, Xi sought to impress upon Trump how seriously China’s Communist Party government regarded its claims over Taiwan.
“The Taiwan question is the most important issue in China-US relations,” said Xi, according to state news agency Xinhua. “If mishandled, the two countries could face confrontation or even conflict, pushing the entire China-US relationship into a highly dangerous situation.”
China claims sovereignty over Taiwan and has threatened to take control of it by force if Taipei resists indefinitely. Admiral Samuel Paparo, the head of US Indo-Pacific Command, has warned that Beijing’s increasingly assertive military exercises around Taiwan are a “rehearsal” for future military action.
In response to Xi’s comments, Taiwan’s foreign ministry said Beijing was “the sole risk to regional peace and stability”.
Some officials and analysts have expressed fears that Xi could extract concessions from Trump on Taiwan during the summit in exchange for help in other areas, such as pressuring Iran to open the Strait of Hormuz.
In particular, there is concern among US allies that Trump might reduce arms sales to Taipei or even change the US diplomatic posture to “oppose” Taiwan’s independence rather than the current stance of not supporting it.
The Trump administration late last year approved a record $11.1bn in arms sales for Taiwan, and is compiling another package worth at least $14bn.
According to China’s foreign ministry, Xi said he “agreed” with Trump on building a “constructive China-US relationship of strategic stability” that would underpin relations for the rest of Trump’s term and beyond.
Rush Doshi, former White House National Security Council China director in the Biden administration, said this was a “major new formulation”.
“Beijing is offering it from a position of strength. It won last year’s trade war, engineered a détente that favoured China and now wants to lock all this in beyond Trump,” said Doshi, who is now director of the China Strategy Initiative at the Council on Foreign Relations. “The practical aim will be to recast any US efforts on trade or technology or Taiwan as a breach of this new understanding.”
Xi also said that the two sides’ economic and trade teams had “reached a generally balanced and positive outcome, which is good news for the people of both countries and for the world”.
Scott Bessent, US Treasury secretary, said on Thursday that the two sides were discussing setting up a “Board of Trade” and a “Board of Investment”.
With the trade board, the two sides would designate about $30bn of non-sensitive or low-value Chinese products that the US does not want to produce that Washington could earmark for lower tariffs, Bessent told CNBC, citing fireworks as an example.
China, in turn, might buy more fuel from the US to diversify its sources of energy, he said. The investment board, meanwhile, would seek to identify non-sensitive areas that both sides could explore in each other’s markets.
Xi and Trump agreed to a truce in their trade war in October, after both sides raised tariffs to more than 100 per cent and China imposed export controls on rare earths crucial to US manufacturing.
“Xi wants to set clear boundaries for the Americans on what they can do and cannot do with China,” said George Chen, partner at the Asia Group consultancy, adding that this applied especially to Taiwan.
The tough comments on Taiwan followed warm opening remarks, with Xi saying the US and China needed to be “partners, not rivals”, while the American president assured him the relationship was “going to be better than ever before”.
Trump also praised Xi as “a great leader”, adding that the delegation of top US chief executives accompanying him — including Apple’s Tim Cook, Nvidia’s Jensen Huang, Tesla’s Elon Musk and Citigroup’s Jane Fraser — had come “to pay respect to you, to China”.
A White House official said the meeting had been “good” and the leaders discussed ways to boost “economic co-operation”, including greater access to the Chinese market for US companies and more Chinese investment in America.
On Iran, the US and China agreed that the Strait of Hormuz should be open while Xi opposed the “militarisation” of the waterway and the charging of tolls for passage, according to the White House. The Chinese president also expressed “interest” in increasing his country’s purchases of US oil.
After their bilateral talks, Trump and Xi visited the Temple of Heaven, a vast Ming Dynasty park in Beijing, on Thursday. Xi then later hosted a state banquet later for Trump, who is also being accompanied by his son Eric.
In his toast, the US president invited Xi to visit the White House on September 24, as he celebrated the “rich and enduring ties” between the US and Chinese people.
Xi said China was achieving the “rejuvenation” of its nation, while the US was “Making America Great Again”, repeating Trump’s trademark political slogan. “We can help each other succeed,” the Chinese president said.
On Friday, the two leaders will have tea followed by a working lunch before Trump returns to the US.
