Trump shrugs off reports of Chinese satellite help for Iran before Xi's state dinner

The leverage here runs through export licences. Trump's mounting tariffs of last year backfired, according to Fortune ^[5]. He now speaks of Xi in different terms: "He's a great gentleman; we get along great," he said this month ^[2]. Michael Kovrig, a senior adviser at the International Crisis Group and a former Canadian diplomat whom China detained during Trump's first term, gave a cause for the change: "Trump has dramatically shifted his approach to China because his initial attempt to use super-high tariffs and export restrictions was unsuccessful," he said ^[7].

China ran a $1.2 trillion global trade surplus last year, roughly $3.3 billion a day, with its low-priced EVs undercutting the auto sectors of Germany, Japan and South Korea ^[17][21]. The tariffs did not curb Chinese manufacturing. The country found new markets and boxed out competition from other industrialized countries ^[16].

Hospitality is what replaced the tariffs. Trump travelled to Beijing in May and could meet Xi twice more this year at international summits, which with Thursday's dinner comes to as many as four meetings in a single year ^[12][22]; Xi met Joe Biden three times, on the sidelines of summits ^[14]. A helipad has been readied on the White House South Lawn for Xi's arrival, and Trump has said he regrets that his ballroom will not be finished in time ^[13].

He has not rebuilt the alliances that used to apply pressure. He has mocked Emmanuel Macron in speeches, run hot and cold on NATO after several members did not fully support his choice to start a war with Iran, and opened a trade fight with Canada ^[10]. Kovrig said Trump has largely undermined the economic and national security alliances that could previously apply pressure on China ^[11]. "He's executing Xi's wedge tactics for him, and along the way, helping Xi to tell a story about China as the more stable and responsible power," Kovrig said ^[9].

The goods imbalance with China has narrowed against the same period in 2025 on Census Bureau figures. The administration says China appears to be routing more goods through other nations such as Vietnam to minimise the tariffs ^[15]. Germany, Japan and South Korea sit both among the economies Chinese technology puts at risk and among the car industries its EVs are undercutting ^[20][23], and neither group is at Thursday's table.

In my view no retaliation follows the two passes Trump has already given Beijing ^[3][4], because the instrument that would deliver one was tried and failed ^[5]. Two developments would overturn that. If Beijing ever trades away the rare earth licence lever, the constraint on Trump goes with it ^[6]. And if the truce is only time to rebuild, the next round arrives once both sides have finished ^[19].