President Donald Trump landed in Beijing on Wednesday for his first visit to China in nearly a decade, greeted by a military honor guard and promises of a 500-jet Boeing deal. The pageantry matters less than what it conceals: a negotiation in which semiconductor trade leverage has become the dominant currency, with AI chips, rare earth minerals, and Taiwan arms sales now fungible bargaining chips in the same transactional brief.
The summit between Trump and Chinese President Xi Jinping, scheduled for Thursday and Friday, arrives as both sides project confidence while facing acute vulnerabilities. China controls roughly 90 percent of global rare earth refining, materials essential for semiconductors, electric vehicles, military equipment and electronics.[s] Washington, meanwhile, holds an eight-month lead in AI capabilities, a significant margin that China believes it can overcome.[s]
The Semiconductor Trade Leverage Equation
This summit is not about tariffs in the traditional sense. It is about leverage economics: who controls what the other side cannot easily replace. Beijing is expected to push for fewer US technology restrictions, while Washington wants China to resume shipments of rare earths and critical minerals after export controls disrupted parts of the American automotive and aerospace sectors.[s]
China is the world’s rare-earths powerhouse, dominating around 85 percent of processing and more than 90 percent of magnet production. Beijing especially commands the separation of heavy rare earths, none of which currently occurs in the United States.[s] This matters because replenishing US munitions stockpiles, under pressure from the war in Iran, requires heavy rare earths, exactly where China holds a quasi-monopoly, according to Tom Moerenhout, who leads the Critical Materials Initiative at Columbia University.[s]
Xi successfully beat back Trump’s unprecedented trade escalation last year, which pushed tariffs past 140 percent, by wielding China’s “break glass” tool of rare earth minerals and magnets.[s] According to Washington insiders interviewed by the EU Institute for Security Studies, Trump changed course on China within a single afternoon in May 2025, acknowledging the extent of China’s leverage, after Beijing’s export-licensing restrictions on rare earths and magnets.[s]
Jensen Huang’s Last-Minute Boarding Pass
Perhaps no image better captures the state of semiconductor trade leverage than Nvidia CEO Jensen Huang boarding Air Force One as a last-minute addition. Huang was not on the original delegation list released by the White House. According to sources, Trump called the Nvidia executive after seeing media coverage of his absence from the trip.[s]
“Huang’s last-minute inclusion to the trip shows there could be a deal between U.S. and China on AI chips sales and export controls,” wrote Jason Hsu, a Taiwanese tech policy analyst. “The shift shows that Trump wants the CEO on the table to be bargaining chip.”[s]
The stakes for Huang are substantial. He has repeatedly lobbied the US administration to loosen export controls to sell Nvidia’s powerful H200 artificial intelligence chips in China. In December, Trump agreed to allow limited shipments of the H200 in exchange for a 25% fee for the US government, but Commerce Secretary Lutnick confirmed that Nvidia has not actually sold H200 chips to China.[s] China’s AI advances have closed the gap with the US, according to this year’s annual AI report by the Stanford Institute for Human-Centered Artificial Intelligence.[s]
Taiwan as Currency
Beijing is “super focused” on “any kind of language shift on Taiwan from Trump,” said Kyle Chan, an expert on US-China relations at the Brookings Institution.[s] Chinese scholars suggest Beijing will press for a shift in US declaratory policy: ideally an explicit statement opposing Taiwan independence rather than the current formulation of “not supporting” it, alongside US pre-negotiation on arms sales.[s]
The semiconductor trade leverage dynamics extend directly to Taipei. Washington has approved more than $11 billion in military sales to Taiwan since Trump returned to office. Yet reports indicate that the White House delayed formal congressional notification of the latest package, worth $14 billion, to avoid destabilizing the summit atmosphere.[s][s]
When asked about Taiwan arms sales before departing, Trump offered a revealing answer: “President Xi would like us not to, and I’ll have that discussion. That’s one of the many things I’ll be talking about.”[s] This marks a departure from historic US insistence that it would not consult Beijing on its support to the island.
The MATCH Act Shadow
As Trump and Xi meet, Congress is advancing legislation that would further tighten the semiconductor chokehold. As introduced on April 2, the MATCH Act, a bipartisan bill that cleared the House Foreign Affairs Committee on April 22, would give the Netherlands and Japan a 150-day window to align their own export rules with Washington’s or face unilateral enforcement via an expanded Foreign Direct Product Rule.[s]
Beijing timed its criticism pointedly. On the morning of Trump’s arrival, China’s foreign ministry called the bill further evidence of Washington’s “overstretching of the concept of national security.” China’s State Council in April published Order No. 834, authorizing legal action against companies deemed to be harming Chinese supply chains.[s]
Beijing has rotated through restrictions on gallium, germanium, antimony, seven medium and heavy rare earths, and silver across the past 18 months, suspending some while keeping licensing requirements in place.[s] The rare earth truce reached in October 2025 is due to expire in early November 2026. Unless both sides extend the agreement, these controls will snap back into force.[s] This legislative and regulatory sparring adds another dimension to the semiconductor trade leverage competition.
Everything Is Leverage
Trump arrives in Beijing carrying tariffs, sanctions, Taiwan, Iran, semiconductors, Boeing aircraft orders, soybean exports and rare earth minerals all in the same negotiating brief.[s] This fusion of previously compartmentalized issues represents a structural shift in how superpowers negotiate.
Scott Kennedy, a senior adviser at the Center for Strategic and International Studies, framed it bluntly: “China and Xi Jinping come into this meeting in a much stronger place than the United States. China has goals that they would like: to extend the ceasefire, to reduce tech restrictions on the imports of semiconductors and lower tariffs. But even if they don’t get much on any of those things, as long as there’s not a blow up in the meeting and president Trump doesn’t go away and look to re-escalate, China basically comes out stronger.”[s]
Beijing will seek to leverage Trump’s desire for headline-grabbing purchase commitments to gain broader access to US advanced technologies, including semiconductor chips and aircraft engines.[s] A sale of 500 Boeing 737 Max jets, one of the biggest orders in the aeroplane-maker’s history, is expected to be announced during the trip.[s]
The Atlantic Council warns that US export controls are national security measures that no administration should put on a bargaining table.[s] Yet the semiconductor trade leverage calculus creates pressure to do exactly that.
China’s Parallel Track
Beijing is not waiting for American concessions. China already has the largest number of industrial robots in its factories, and the state plans to invest around $400 billion in robotics in 2026 alone.[s] In 2022, the Biden administration tried to arrest Chinese AI and robotics by denying it cutting-edge semiconductors. Trump has relaxed that policy, but China’s domestic chip development has accelerated regardless.[s]
China’s exports to the US have fallen by around 20% in the last few years and America is now China’s third-largest trade partner, behind South East Asia and the European Union.[s] Yet US-China goods trade still exceeded roughly $575 billion last year despite years of tariffs, sanctions and escalating strategic hostility.[s]
The EU Institute for Security Studies concludes that Washington is unlikely to lift restrictions on frontier semiconductors, although concessions on China-compliant or mid-tier chips are possible.[s] The pursuit of semiconductor sovereignty by nations worldwide reflects how deeply the supply chain vulnerabilities have reshaped policy thinking.
What to Watch
The precise wording will matter. Whether Trump reaffirms support for Taiwan’s defense, whether he sounds ambiguous on arms sales, and whether he gives Xi any rhetorical opening to claim that Washington is restraining Taipei, all carry long-term consequences.[s]
Chris Berry, president of House Mountain Partners, offered a sobering assessment of American leverage: “We’re still a long, long, long ways away before, I think, we can declare any kind of partial victory in terms of developing a homegrown supply chain.”[s] The asymmetry in semiconductor trade leverage will persist until that changes.
The summit is the first of four expected meetings between Trump and Xi this year, including a likely reciprocal state visit to the US.[s] Neither side is looking for a grand bargain. Both are seeking tactical stabilization while preserving their leverage for the next round.[s] The semiconductor trade leverage architecture that now defines superpower competition will outlast whatever communiqués emerge from Beijing.
