Strait of Hormuz, prospects for US firms: 5 takeaways from Day 1 of Trump-Xi summit

[SINGAPORE] US President Donald Trump began the first American state visit to China in nine years on Thursday (May 14), having arrived the previous night with top CEOs and executives.

He was greeted at the Great Hall of the People in Beijing by Chinese Premier Xi Jinping with a red carpet, honour guards and a 21-gun salute.

Trump’s delegation included Apple’s Tim Cook, Tesla’s Elon Musk and Citigroup’s Jane Fraser; Nvidia CEO Jensen Huang was a last-minute addition, given that artificial intelligence chips are expected to be a key focus in the two days of talks.

When Trump and Xi met in South Korea last year, they agreed on a one-year extension of the tariff truce, a pause on China’s wide-ranging export controls on rare earth minerals and the resumption of large-scale purchases of US soybeans by China. Port fees and related penalties were also postponed.

This year, the White House is keen for China to buy more US energy and agricultural goods. Discussions are also expected to cover tariffs, the war in Iran and Taiwan, with the latter having been described by Xi as the “most important issue” in US-China ties.

In his opening remarks, Trump said the relationship between China and the US “is going to be better than ever before”. Earlier, Xi had said the two countries should be “partners, not rivals”.

Chinese state media later reported that Xi’s meeting with Trump lasted over two hours 15 minutes, with Trump describing it as “great”.

The Business Times takes a look at five key takeaways from Day 1 of the two-day summit.

Both leaders agree Strait of Hormuz must be open

US President Donald Trump and Chinese President Xi Jinping agreed that the Strait of Hormuz must be open, according to the White House read out of the summit on Thursday.

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Pursuing stability

In a handout from the Chinese foreign ministry, Xi stated that he and Trump had agreed to build a relationship based on “Constructive Strategic Stability”, which entails cooperation, benign stability with moderate competition, normalised stability with manageable differences, and lasting stability with a promising future of peace.

The relationship between China and the US is not just a slogan, said Xi, but should be a matter of “concerted action”.

China’s foreign ministry, in a statement on Thursday, said that the economic and trade teams of the two countries reached a “generally balanced and positive outcome” the previous day, which is “good news for the people of both countries and the world”.

During their meeting, Trump reportedly told Xi that it was an “honour” to be his friend, said a post on X by Emily Goodin of New York Post.

Henrietta Levin, senior fellow at the Centre for Strategic and International Studies, later told Bloomberg TV that “Xi is not looking for friends” but instead wants to “manoeuvre the US into the position that is best for China” by avoiding tariffs and ensuring economic stability.

Business leaders meet

About 10 US business leaders, including Apple’s Tim Cook, Tesla’s Elon Musk, Nvidia’s Jensen Huang, Citigroup’s Jane Fraser and Blackstone’s Steve Schwarzman, entered the meeting site later.

The BBC reported that 18 business leaders are in Trump’s entourage on this trip, with dealmaking and networking expected on the sidelines. Members of the US business delegation travelling with Trump come from industry sectors ranging from tech and finance to aviation and agriculture.

CCTV, China’s national broadcaster, reported that the executives told Xi that they “highly value” the Chinese market and hope to expand their business presence in the country.

“American enterprises are deeply involved in China’s reform and opening up, a process from which both sides have benefited,” Xi was reported as having said.

Xi said Beijing’s door “to the outside world will only open wider … American companies will enjoy even brighter prospects in China”.

Musk said the meetings were “wonderful” and that he looked forward to accomplishing “many good things”. Huang concurred and added that Xi and Trump were “incredible”, Bloomberg reported.

The Thucydides Trap

In his opening remarks, Xi asked rhetorically whether China and the US could avoid the “Thucydides Trap”, a term popularised by Harvard professor Graham Allison.

It describes the historic trend of tensions spilling into war when rising powers challenge the geopolitical status of an existing superpower. Ancient Greek historian Thucydides had observed such tensions between the rising Athens and Sparta.

Dr Allison argued in his 2017 book Destined for War that while such a war is not inevitable, it requires extensive and intensive diplomatic attention.

Taiwan: the ‘most important issue’

In an official readout from China’s official state news agency Xinhua, Xi said bilateral relations between the US and China can remain “generally stable” if the Taiwan “issue” is handled well.

“If mishandled, the two nations will experience collision or even clashes, pushing the entire China-US relationship into a highly dangerous situation,” he added.

He also said “Taiwan independence” and peace in the Taiwan Strait are incompatible.

Trump and Xi later ignored a question about Taiwan from the media during their visit to the Temple of Heaven.

In response to the leaders’ comments, Taiwan Cabinet spokesperson Li Huizhi was reported by Taiwanese publication Commercial Times to have said that the Chinese military threat is the only source of instability in the Taiwan Strait and the Indo-Pacific region.

Additional reporting by BT’s Jermaine Fok, Reuters, Bloomberg