Trump hosts Xi in Washington as US-China AI and trade rivalry deepens

Washington,UPDATED: Sep 22, 2026 10:16 IST

US President Donald Trump will host Chinese President Xi Jinping in Washington this week at a time when competition between the world’s two biggest economies is deepening, especially on trade and artificial intelligence. The visit comes even as both sides are trying to steady a fragile relationship and avoid a wider breakdown in ties.

No grand bargain is expected from the summit, but both leaders are likely to keep the engagement cordial in what will be their third meeting since Trump returned to the White House. Even as they seek stability, the US and China remain locked in a contest over AI, trade and influence on issues such as Iran and Taiwan.

Senator Steve Daines, a Montana Republican who advises Trump on China and recently travelled there to help prepare for the summit, said, "The fact that they are meeting, and there’s dialogue occurring and building that relationship, is probably as important as outcomes from the meeting." Cui Tiankai, a former Chinese ambassador to the US, said at a recent forum in Beijing that there are "always problems, sometimes very big problems" between the two countries, but added, "we’ll make our best efforts to maintain overall stability."

Xi’s visit, which begins on Wednesday, will be his first to Washington in 10 years. The meeting comes after both countries stepped back from last year’s trade war, when they imposed tit-for-tat high tariffs that threatened the global economy. China had also cut off supplies of critical minerals used in products ranging from electric cars to fighter jets. The US is trying not only to balance trade but also to protect its technological lead for national security and global leadership, while China is seeking to strengthen its place in the global order after building up its economic, technological and military power.

Evan Medeiros, a senior adviser at consultancy The Asia Group, said the stability both sides want is "for deeply competitive reasons" and added, "This is basically two geopolitical strongmen circling each other on the playground, trying to determine what their next move may be." Da Wei, director of the Centre for Security and Strategy at Tsinghua University in Beijing, said the two countries appeared to be entering a "new normal" of "overall stability" despite blacklisting each other’s companies and limiting the flow of high-tech products. He said the leaders now should produce deals their governments can carry out, adding that "we need to move fast".

AI has become a major battleground in the relationship, with neither side showing any sign of slowing down. Trump has repeatedly said, "Whoever wins AI wins." On social media on Monday, he said the US was ahead of China and that he was "not going to stifle Growth, of something that will be bigger than the Industrial Revolution, or the Internet, itself." In China, Chen Yixin, who heads the Ministry of State Security, warned in a rare blunt essay that AI poses a direct threat to Communist Party rule if foreign and hostile forces gain superior capabilities.

The US is already blocking exports of the most powerful AI chips to China and has accused Chinese developers of using American AI models at an industrial scale to extract their capabilities. Beijing says the practice, known as distillation, is widely used, including by American companies, and has criticised Washington for trying to monopolise the industry. China is also unhappy with US efforts to build an alliance that leaves it out, and is trying to shape new global AI guardrails by appealing to developing countries. At the same time, there has been a small move towards cooperation. Treasury Secretary Scott Bessent said on Sunday after meeting Chinese Vice Premier He Lifeng in New York that the US had proposed a new "notification mechanism" for AI incidents that could affect national security. "We think that just like any cross-border activity, that moving from opaque to more transparency between the No. 1 and the No. 2 AI powers in the world is very important," Bessent said.

Even without broad punitive action that could damage the trade truce, both countries have continued to compete through targeted measures. Mira Rapp-Hooper, a visiting fellow at the Brookings Institution’s Centre for Asia Policy Studies, said, "What we’ve seen is kind of testing and probing by both sides to understand what can be done competitively, while still keeping that leader-level rapprochement on track." The US has recently targeted Chinese telecommunications and surveillance equipment, companies accused of using forced labour in Xinjiang, and China’s advanced robots and drones. The Pentagon has also barred Alibaba, BYD, Baidu and other major Chinese businesses from getting US defence contracts. Beijing responded with export controls on drones and related technologies, and blacklisted six US companies over their support for the punitive measures linked to Xinjiang.

Tariffs remain another difficult issue. After the Supreme Court struck down Trump’s tariffs on trade partners this year, his administration began trying other ways to impose them. In July, the White House announced a 12.5 per cent tariff on imports from 60 trading partners, including China, saying they had failed to do enough to stop the import of goods made with forced labour. The US is also planning an additional 7.5 per cent tariff on China, accusing it of producing far more goods than it can reasonably consume. Analysts say the current tariff levels are acceptable to both sides, but warn that any major increase could raise tensions again.

Iran and Taiwan are also expected to remain sensitive issues. The Trump administration has been trying to isolate Iran from its remaining economic partners, but Beijing has insisted on its right to trade with Tehran. So far, Washington has done little to punish China, partly to avoid harming the summit, while also losing leverage because China, Iran’s biggest oil buyer and largest trading partner, has been developing ways to make payments outside the US-led financial system, according to Alicia Garcia Herrero, an Asia-Pacific economist at French investment bank Natixis. On Taiwan, which Beijing claims as its own territory, Trump paused a large weapons package after his May trip to Beijing, though US law requires Washington to provide the island with enough hardware and technology for self-defence. Analysts say Xi is likely to press Trump to delay arms sales further in an effort to raise doubts in Taiwan about Washington’s commitment.

The summit is therefore expected to focus less on a breakthrough and more on keeping the relationship from worsening. Even as the US and China try to preserve overall stability, their rivalry over AI, trade, Iran and Taiwan continues to shape the agenda before Trump and Xi meet in Washington.

With PTI Inputs

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