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On the eve of the September 24 meeting between Donald Trump and Xi Jinping, representatives of both sides sat down for a closed-door “technical” session. On the American side were Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, and on the Chinese side, Vice Premier of the State Council He Lifeng. Their goal was to find common ground on the issues that matter most, namely the trade imbalance, artificial intelligence, and rare earth elements and critical minerals. And while this meeting carries obvious weight for the two countries themselves, given the geopolitical stature of those at the table and the sharp rhetoric of the ongoing trade wars, its consequences reach far beyond Washington and Beijing. The rest of the world has a stake in how this plays out.

Let’s start with a simple observation. China is already beginning to overtake the United States in a number of industries, take electric vehicles and batteries for instance. Companies like BYD haven’t merely caught up. By sales volume they have already pulled ahead of Tesla, while the battery giant CATL commands the lion’s share of the global lithium-battery market. While Detroit is still slowly warming up to the shift toward electric drivetrains, Chinese factories are churning out affordable models that sell briskly at home, across Asia and Latin America, and are pushing ever more aggressively into Europe. The same story is unfolding in solar power. More than 80% of all solar panels in the world are made in China today, from silicon wafers to finished modules. American manufacturers simply cannot keep pace in the price race, and even tariffs do little to change the picture. Whoever controls panel production largely sets the tone for the entire planet’s green transition.

It is now clear that the United States has no intention of running this race alone. Washington is betting on its allies – first and foremost Japan and South Korea, two countries that are technological heavyweights in their own right. The logic is straightforward: if catching up with China’s sheer scale single-handedly has become all but impossible, then pooling resources, patents, and manufacturing capacity collectively evens the odds. As one example, in response to the growing alignment between Russia and China on Arctic affairs, the United States, Japan, and South Korea intend to build a framework for cooperation in the Arctic covering navigation and mineral extraction. According to the newspaper Yomiuri, the relevant document is now in the final stages of coordination and is set to be signed by the three countries’ foreign ministers at their meeting on the sidelines of the UN General Assembly session in New York. Yet look at it from the other side, and the picture grows more complicated: both Japan and South Korea are deeply tied to the Chinese market – for them, Beijing is an enormous customer, and nobody truly wants to sever those economic bonds. In other words, Washington still holds the technological high ground thanks to the strength of its infrastructure, while Beijing, for its part, is rapidly and efficiently expanding its own production base.

Economists around the world tend to agree that America’s “tariff war” against China has produced a paradoxical result. On one hand, Washington held onto its lead in cutting-edge artificial intelligence and supercomputing, keeping China away from the most advanced manufacturing processes. On the other, the US effectively pushed China toward building a self-sufficient ecosystem of its own. According to official figures from China’s Ministry of Industry, in 2025 the country produced a historic record of 484.3 billion microchips, a jump of 85.2% over the 2020 level.

On trade, Washington is pressing for a smaller deficit and more balanced access to the Chinese market, while the current trade truce, the agreement capping mutual tariffs at roughly 20%, expires on November 10. As a gesture of goodwill, the Trump administration postponed the announcement of new tariffs until the talks conclude. Also on the table is a reduction of tariffs on non-critical goods, in exchange for which China is expected to step up its purchases of American agricultural products and other commodities.

But if the trade deficit is a matter for bargaining, rare earth elements are more of a pressure lever. That’s because China controls a substantial portion of the world’s mining and, especially, processing of rare earth metals, along with the production of the magnets essential for automobiles, electronics, energy, and the defense industry. As we have already noted in our previous article, China currently controls a significant share of global processing capacity and plays a central role in supplying these materials to other countries. China covers a large part of the European Union’s rare earth needs, roughly 40%, while other important suppliers include Australia, South Africa, Canada, and Brazil. This level of dependence has become a serious strategic problem for Western countries, and for the United States in particular. Control over the extraction and supply of vast quantities of minerals remains one of China’s strongest cards in its trade war with the United States. In December 2024, even before Trump’s return to the presidency, Beijing responded to American sanctions against Chinese semiconductors by banning or sharply restricting exports to the United States of antimony, gallium, germanium, and graphite. These are four elements that are not, strictly speaking, rare earths, but which Washington has likewise placed on its list of “critical minerals.”

It would be a mistake not to mention the US midterm elections, set for November 3. This is an important political deadline for Trump. The results will determine the balance of power in Congress and, with it, the room he has to push through his agenda. Against this backdrop, foreign policy is becoming ever more tightly interwoven with domestic affairs. The trade war with China, the energy crisis, and its economic fallout are turning into matters not just of foreign policy but of America’s internal agenda as well. For Trump, then, the upcoming meeting with Xi is at once a negotiation over the global balance of power and an attempt to show voters a concrete result of his own policies.

On top of all this, and against the backdrop of the war with Iran in the Middle East, the US national debt has surpassed 40 trillion dollars, reaching 127% of the country’s GDP. Over the past decade, the American national debt has more than doubled. Per capita, that works out to roughly 120,000 dollars for every US resident. And earlier this month, President Donald Trump declared that every adult American would receive five thousand dollars if the Republicans hold onto control of both chambers of Congress after November’s midterms. China, meanwhile, is ramping up both overseas investment and domestic spending, leading the global investment race with a figure of around 5.9 trillion dollars a year.

In August, China’s foreign trade surplus stood at 119.09 billion dollars, the fourth month in a row in which the positive balance topped 100 billion. Chinese exports rose 25% year on year in August, while imports climbed 28%. Over the first eight months of 2026, the country’s trade surplus exceeded 800 billion dollars, and by year’s end it could well surpass last year’s record of 1.2 trillion. Chinese goods are pushing energetically into markets beyond the US. Over the year, exports to Southeast Asia grew by nearly 26%, to Africa by more than 25%, and shipments to Canada rose by over 10%. Demand for Chinese products is being fueled, among other things, by the global buildout of artificial intelligence infrastructure. In August, exports of Chinese semiconductors jumped by almost 130%, and those of automated data-processing systems by 77%. At the same time, China’s trade surplus with the US grew by 44% in August, topping 29 billion dollars, the largest figure since the start of Trump’s second presidential term.

When it comes to the risks of AI, one could well call them the central reason behind the Trump and Xi meeting. Beyond the “viral” videos about a “robot uprising” and the warnings from experts about autonomous AI, something far more serious is unfolding today. Artificial intelligence is no longer just a technology sector. It is becoming a new front in the struggle for economic and geopolitical advantage.

Tellingly, Trump announced the creation of an “AI Force” and the appointment of a special “AI czar,” a dedicated advisor, while at the same time declaring that the United States has no intention of slowing this industry down. By his estimate, AI could eventually account for as much as 25% of US GDP. And so, in his words, the United States will continue to lead and to carry the rest of the world along with it, China included.

As we can see, this is already the second attempt to reach some kind of understanding in the field of AI. Washington and Beijing made the first under the Biden administration in 2024, but it came to nothing. Mismatched expectations about the agenda, and disagreements over Taiwan, meant the effort never got past the first meeting. Since then, however, AI technology has taken a dramatic leap forward. Just last week, UN Secretary-General António Guterres named the possibility of AI agents slipping out of human control as one of humanity’s three “existential threats.” Comparing AI technology to nuclear weapons, he called on the leading powers to cooperate in the AI sphere. “During the Cold War between the US and the Soviet Union there was confrontation, but they nevertheless kept in contact over nuclear risks,” Guterres observed. The heads of several leading American AI developers, namely Anthropic (Claude), OpenAI (ChatGPT), and xAI (Grok), have recently sounded the alarm about AI-related risks as well. In their assessment, without outside oversight and limits, AI technology could lead to extremely negative consequences, up to and including the destruction of humanity. They backed up their arguments, among other things, with data on several troubling incidents in which AI models under testing went beyond the bounds of their assigned tasks and, quietly coordinating with one another, undertook joint actions that no scenario had ever anticipated.

All of this reaches far beyond the question of regulation. Whoever gets to define the rules for AI’s development will hold sway over the next technological era. And so, in the coming talks between Washington and Beijing, AI turns out to be all at once an economic resource, a matter of national security, and an instrument of global influence.

What would our world look like if Washington and Beijing did, after all, manage to work out their differences? Is rivalry between a power already firmly established in the world and one that is rapidly gathering strength truly bound to lead to conflict and war? It was to just such a conclusion that the Greek philosopher and historian Thucydides came some 2,500 years ago, as he analyzed the war between the rising sea power of Athens and the established land power of Sparta. Beijing and Washington are locked in rivalry on every conceivable level, each striving to outdo the other. But how it all ends, that only history will show.