United States–China: Global Strategies

When President Trump’s state visit to Beijing was announced in mid-March 2026, to take place at the end of that same month, the international press realised that the US–China partnership had been initiated. What are the economic, financial and geostrategic consequences of this meeting, and what can we expect in September when the two leaders will meet again in Washington? (1)

The postponement of the visit, proposed by President Trump, took place against the ongoing crisis in Iran – a war that the Israel–US alliance had failed to win as planned, within a week or two at most (2). President Trump wanted to buy time in an attempt to demonstrate to the Chinese leader, Xi Jinping, America’s determination, technology and strength in the Middle East. By extension, this would have sent a signal regarding the Indo-Pacific region, with an emphasis on the Taiwan issue. However, due to miscalculations and distorted information provided by his strategic ally regarding Iran’s capacity for resistance and reaction, President Trump lost the advantage he had been counting on. Meanwhile, in the wake of the crisis in Iran, China attempted to stabilise the global price of oil, saving the planet – and itself – from an energy crisis with enormous consequences for the functioning of the global economic and financial system (3).

Thus, on the eve of the visit to Beijing, from 13 to 15 May, we had a slight advantage in terms of image and the projection of power for China. The message was correctly perceived by the American leader and resulted in relations between the two powers changing from that point onwards. From a ‘controlled strategic competition’, marked by high tensions, they moved towards ‘constructive strategic stability’. (4)  Mechanisms were established for managing both economic crises (Trade Council, Investment Council – for the settlement of disputes) and political-military crises, according with the statement made by the US Secretary of Defence, Pete Hegseth; a framework has been drawn up based on “mutual respect, recognition of capabilities and power” and communication (5). The concept known as “recognition of mutual vulnerability” – and therefore recognition of capabilities and power – is one of the objectives China has been seeking for a long time. In essence, the concept is based on the fact that both sides mutually recognise each other’s capacity to inflict massive destruction in retaliation, which means that a total and deliberate nuclear war becomes irrational (6).

The concept of ‘recognition of mutual vulnerabilities’, ‘mutual vulnerability’ or ‘mutual nuclear deterrence’ forms the practical basis of strategic stability between two states.

China was given this status by the United States in May 2026. Only one other country in the world currently enjoys this status from the US: Russia (7).

This does not mean that everything went perfectly at the meeting between the two leaders; “The United States and China will face clashes and even conflicts if the long-standing issue of Taiwan’s independence is mishandled,” the Chinese leader warned in a clear tone that left no room for interpretation. A surprising statement, given that, until now, China has promoted a policy of ‘peaceful reunification’, which translates into efforts for dialogue or, more recently, ‘suffocation’ through an excessive military presence in the immediate vicinity and the occupation of the entire maritime area surrounding Taiwan. But this can only be achieved through a disengagement by the United States. This is the context of the Chinese leader’s remark made at the meeting in May 2026. If we were to take into account the discussions between Mao Zedong and Henry Kissinger at their meeting in 1973, Taiwan should not represent such a significant obstacle in the process of normalisation between the two countries (8). It is hard to believe that America will renounce its deeply rooted mercantilism. As President Trump said, “everything is negotiable”. Taiwan will probably be a bargaining chip to be played at the most suitable moment. If the opportunity arises, President Trump will certainly not let it slip by. After all, he will go down in Chinese history as the man who, like Nixon, restored relations with China and paved the way for the country’s reunification.

After 19 months of geopolitical, economic (the tariff and tax war) and military (Venezuela, Iran, Ukraine, the starvation of Cuba through isolation) upheavals, which have led to an unpredictable global climate where international law is more a matter of theory than practice and liberal globalisation has turned into economic nationalism through the use of transactional diplomacy, it seems that we are approaching a new phase in which the leader from the White House is seeking cooperation to stabilise global events that have recently created more enemies than friends for the United States. The steps taken by President Trump over the past 12 months (the meeting from Alaska) – yesterday Russia, today China – suggest a global geopolitical realignment, possibly a sharing of spheres of influence.

Aside from establishing positions in relation to the new geopolitical architecture and setting out the boundaries to be respected in relations between the two states, the May meeting clearly also featured an economic dialogue in which the exchange of various commercial contracts was a key topic: meat, soya, minerals and rare earths, aircraft and some technology… subjects widely debated in the Western media.

While no details are known regarding China’s purchase of the 200 aircraft, the intention is there. The most pressing issues – the state of affairs in Iran and Ukraine – were addressed. Both sides agree that Iran must not possess nuclear weapons and that the Strait of Hormuz must be reopened (with China currently being the most affected. The US elections at the end of this year are very likely to take their toll on the Trump administration as well). The likely solution envisaged by the two leaders – although it will take some time – would be a treaty similar to the one negotiated and signed in 2015, the ‘Joint Comprehensive Plan of Action’ (JCPOA), from which the US withdrew in 2018. However, the US’s vulnerability on this issue, as on many others, comes from its strategic ally, Israel, which is far too fickle and, at the same time, too influential in Washington to allow an American president to sign a new agreement without obtaining solid guarantees. Any initiative to sign an agreement without Israel’s consent is doomed to failure, as has been demonstrated time and again — in 2018 or more recently in relation to the Gaza Plan of August 2026.

As regards Ukraine, the channel of communication with Russian President V. Putin remains open and is very likely functioning well.

The White House talks with President Trump during the Chinese leader’s state visit to the US, scheduled for 23–25 September, are very likely to focus on the signing of a joint declaration on strategic stability, similar to the one signed in 2021 by Presidents Biden and Putin. The next step could be the signing of a treaty between the two sides, though it is unlikely that this will happen very soon. Perhaps after the Taiwan issue has been settled. Trade and investment will certainly feature heavily in the discussions, with new economic cooperation agreements in the fields of agriculture, technology, minerals and rare earths likely to be signed. This will provide an opportunity to learn more about the sale of the 200 Boeing aircraft. Naturally, however, the main topics to be addressed will be the tariffs and trade war between the two countries, the conflict in Iran and the war in Ukraine. While the war in Ukraine is currently at a standstill, yet continues to generate money for the American arms industry whilst impoverishing Europe, the issue of the war in Iran and the blockade of the Strait of Hormuz are both thorny problems for both sides. China needs oil from the Gulf, while America spends $375 million a day on its military presence in the Gulf.

This means that a quick solution, pending a future treaty, would be a possible compromise by the United States whereby Iran would be allowed to re-enter mainstream international relations – a sort of ‘draw’. The question is: will Israel agree to such a solution?

One interesting point to note in the Chinese leader’s visit schedule in Washington is that he has not set time aside to take part in the general debates of the 81st Session of the UN General Assembly, which will be held from 22 to 28 September in New York.

Since May, the financial markets have viewed the Beijing meeting as a diplomatic stabilisation, though it has not represented significant policy progress capable of attracting investment. This means we are seeing a calm market and a fairly steady investment trend, with the exception of Artificial Intelligence (AI), which continues its artificial rise. Energy prices in the US have risen by 40 per cent over the last six months, leading to a decline in household budgets. The US federal government’s total public debt has exceeded $40 trillion, or 126 percent of GDP, which does not represent a huge debt for an economy the size of the US, contrary to what is reported in the Western European media (9). By comparison, France has a debt of 118.1 percent and Italy 138.5 percent. The Federal Reserve’s main priority remains to bring inflation down to 2% from the current 3.7%. The yield on 10-year US government bonds stands at around 4.75%, which would substantially boost the market ahead of the elections.

However, the key question is not merely whether inflation will reach the 2% level for a month, but whether the markets believe it will remain at that level for the next 2–5 years.

Conclusions

1. The Trump–Xi summit of May 2026, held in Beijing, led to the creation of an explicit framework for ‘strategic stability’, with both sides committing to avoid open conflict and to maintain regular dialogue. Taiwan remained an outstanding issue that the two sides would need to resolve.
2. The May visit created an opportunity to move from a relationship of competition between the US and China towards one of collaboration. The September meeting in Washington will reveal whether the relationship has indeed shifted towards cooperation, not only in economic terms but, above all, in terms of global strategy. Xi’s attempt to stabilise the oil market for a period of six months has led Trump to realise that together they can ‘achieve many important and good things for the two countries and for the world’ (10). Thus came the idea of spheres of influence emerging between the United States, China and Russia (11). The US–Russia relationship is already heading in this direction, at least until the end of Trump’s mandate. The sooner the wars in Ukraine and Iran come to an end, the more the relationship between the three will grow closer. Europe? Insignificant in this geopolitical realignment. A consumer living on past glories. Does it stand a chance of recovery? At present, it is moving in the diametrically opposite direction, contrary to its long-standing interests and those of the major global players.
3. The United Nations is not a priority for the two presidents, Trump and Xi. If they were to work together to initiate in-depth structural reform, this would send an important global message. The EU, which itself lacks significant structural reform, finds itself in a fragmented and unsustainable position due to a lack of clarity and consistent political objectives, as well as a considerable degree of historical vanity.
4. Xi will do everything in his power to persuade Iran that there is a time for war and a time for peace. However, the solution lies in Trump’s hands, who in turn is bound by his relationship with Israel. Israel, on the eve of elections on 27 October 2026, with a civil society formed and reshaped by Benjamin Netanyahu over the course of 19 years and six governments, does not seem inclined to back down. Only a decisive shift in attitude in America can change Israel’s intransigence. The key to success, perhaps, lies with the start of a collaboration between China and the US.
5. Investments in the field of Artificial Intelligence (AI) remain immune to the disruptions in the global macroeconomy. This is despite exponentially increasing energy consumption, driven both by the proliferation of AI centres and rising energy prices. At the same time, we are seeing a contraction in public sector and household spending budgets. We are on the doorstep of an AI bubble.
6. The financial markets will continue to follow a sinusoidal curve, with the war in Iran being the only variable affecting the trend, though there is a clear tendency towards relaxation following the May meeting between the two leaders.

Recommendations for your wallet

• Any wise investor understands that an economy operating with high energy prices, relying on its national reserves – which are running low – and with falling household consumption expenditure cannot sustain infinite expansion of the AI sector. Furthermore, over the past two weeks, it has become noticeable that financial fund managers are using announcements of exceptional profits in the AI sector as opportunities to sell off their positions and reducing their exposure. Much also depends on what happens in Iran. But in any case, bond yields will rise in September in both the US and the EU, to curb inflation and make bonds more attractive. That is why I would sell AI now (or at least stop buying it) and position myself to buy bonds in September.
• The global energy sector is facing a severe disruptive shock. The price of oil has once again reached high levels ($92 per barrel) following the conflicts in the Strait of Hormuz. Iran is not prepared to back down, and it is highly likely that the conflict will continue. Just like last week, I recommend buying oil futures contracts through a broker who offers access to the relevant exchanges and who can trade derivatives.

Enjoy life as it is!

1. Basile Neacsa, is a Professor of International Relations, University of Brussels
2. https://www.geopolitic.ro/2026/08/china-petrolul-si-statele-unite-sau-cum-geoeconomia-influenteaza-planeta/
3. https://www.reuters.com/world/china/trump-postpones-trip-beijing-iran-war-delays-china-reset-2026-03-17/
4. https://thediplomat.com/2026/07/forging-china-us-constructive-strategic-stability-starts-in-the-nuclear-realm/
5. Ibidem
6. https://carnegieendowment.org/russia-eurasia/posts/2017/02/the-role-of-nuclear-weapons-in-the-us-russian-relationship
7. In June 2021, Presidents Biden and Putin reaffirmed this principle and undertook to engage in a dialogue on strategic stability through a joint statement (“a nuclear war cannot be won and must never be fought” – a doctrinal concept introduced by Gorbachev and Reagan).
8. On 12 November 1973, a meeting took place between Mao Zedong and H. Kissinger in Beijing. The dialogue went as follows: Mao – “We can manage without Taiwan for the moment and leave it for a hundred years’ time. Why such a rush?”; H. Kissinger: “We are continuing to reduce our presence there… We are willing to give effect to the principle of one China as expressed in the last communiqué.”
9. https://www.reuters.com/world/us-debt-crosses-40-trillion-threshold-after-doubling-under-trump-biden-2026-08-19/
10. https://english.news.cn/20260514/e5c24271180e4860982e017b427d41d4/c.html
11. https://instituteofgeoeconomics.org/en/research/2026073001/