Following the meeting between Chinese President Xi Jinping and U.S. President Donald Trump in Washington, DC, leading experts examine what the summit means for the U.S.-China relationship. They assess the substance behind the summit’s outcomes—from policy shifts and new mechanisms to signals of intent—and what to watch in the months ahead. Speakers include The Honorable Dr. Kevin Rudd AC, global president and CEO of Asia Society; Amy Celico, executive director of Schwarzman Scholars; Wendy Cutler, senior vice president of the Asia Society Policy Institute; and Paul Triolo, honorary senior fellow on technology at the Center for China Analysis (CCA) and partner at Albright Stonebridge Group. Neil Thomas, senior fellow on Chinese politics at CCA, moderates the conversation.
This transcript was lightly edited for clarity and readability with the assistance of AI.
Neil Thomas: Hello, and welcome to this webinar hosted by the Asia Society Policy Institute’s Center for China Analysis, or CCA. I’m Neil Thomas, a senior fellow at CCA, where I lead our work on Chinese politics, and I am delighted to be moderating today’s conversation on Chinese President Xi Jinping’s state visit to Washington, D.C. Over three days, from September 23 to 25, Xi participated in a series of meetings and events with his American counterpart, President Donald Trump, and this was Xi’s first visit to Washington since 2015, and his first to the United States since 2023. But it, of course, came after a period of intensified diplomacy following the supply chain standoff triggered by Trump’s Liberation Day tariffs in April 2025. Since then, the U.S.-China Economic and Trade Consultation Mechanism, led by Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, has met several times. Trump and Xi met in Busan, South Korea, last October and agreed to a trade truce. And Trump visited Beijing in May. For those who want to dig a bit deeper on the summit and its outcomes, CCA has just published this morning some analysis by our experts that we’ll put a link to in the Zoom chat. But even more important, with me today to analyze what Xi’s visit accomplished and what it means for the future of U.S.-China relations is an incredible high-level panel. Kevin Rudd is the global president and CEO of Asia Society, a former prime minister of Australia, and a leading international authority on China. Wendy Cutler is senior vice president of the Asia Society Policy Institute and previously served as deputy U.S. trade representative. Amy Celico is executive director of Schwarzman Scholars and previously served in senior China-focused roles at USTR and the U.S. Departments of Commerce and State. And Paul Triolo is an honorary senior fellow on technology at CCA, as well as a partner and Technology Policy Lead at DGA-Albright Stonebridge Group. We only have 45 minutes for this conversation today. We’re finishing at noon. So let’s start with a quick overall assessment of the summit. If we can start with you, please, Kevin. You’ve sat across the negotiating table from both President Trump and President Xi, and I’m curious how do you think they differ in their approaches to diplomacy? How were these differences on display during the summit? And more broadly, how important do you think that the personal relationship between the two leaders is to the broader trajectory of U.S.-China relations?
Kevin Rudd: Thank you, Neil, and greetings everybody who’s tuning into this webinar, and to my colleagues from the Asia Society. I think I’ll make two or three broad remarks to begin with, because we have a lot of expertise to bring to the various elements that were on the discussion table. I won’t say negotiating table in Washington. First, to understand the strategy which the Chinese bring to bear with this and other summits with the President of the United States, China for the immediate period ahead, by which I mean through until the end of next year, when we’ll see the conclusion of the 21st Party Congress, which will decide on the next slate of Chinese leaders, and what I assume to be the reappointment of Xi Jinping for a fourth term, the Chinese are seeking to be in maximal stability mode, by which they mean they would like to bring about a relationship at a strategic level with the United States and between the two leaders through what the Chinese call leader-level diplomacy, in order for there to be a minimal number of surprises coming out of the United States between now and the end of next year. Secondly, the underpinning logic of that is that China does not want any surprises on the economic front through a further exacerbation of the tariff regime, and there’s a reason for that in particular, namely that the Chinese economy domestically is performing poorly. The domestic drivers of growth are not properly functioning. Private domestic demand is still in the doldrums. China’s private fixed capital investment rates are still flat. Private residential construction has been in recession for six consecutive years, and so therefore, one of the few pistons working in the overall economic machine of the Chinese growth model is net exports, so the Chinese, when they want stability, what they mean by that is no more new tariffs, and can we get existing tariffs down? That’s stability mode. I think the third point I make is China going into this particular set of negotiations and meetings and discussions with President Trump would have been seeking to achieve the overall improvement of what is America’s reasonably formidable set of export controls as it relates to advanced technologies and semiconductors in particular. The Chinese have sought to apply their own counter-leverage on this. They’ve sought to do so through their own restrictions on critical minerals and rare earths, and therefore, in the Chinese lens at least, they’ve sought to establish some sort of quid pro quo between these two domains: semiconductor exports from the United States to China on the one hand, which goes to China’s abiding weakness in its AI stack, namely the power of its compute through the lack of power of its semiconductors relative to those of the United States, and at the same time seeking to apply the leverage of critical minerals and rare earth supplies to the Americans in order to induce change on America’s part. On that front, I think we could say, as of now, the Chinese have not achieved their objective, and furthermore, it is, I think, improbable that they will. But I’ll bow to the judgment of others on that. The final element I’d throw into the stability equation is that the Chinese do not want any further surprises on their external strategic circumstances, principally Taiwan, and therefore what they have sought to do, both through the May summit in Beijing and more recently in the summit conducted in Washington, D.C., is to make it harder, as a consequence of the strategic relationship with the United States and the personal relationship between the two presidents for the United States to, as it were, break out and resume normal arm supplies to Taiwan. This is still an open question. We still have two further meetings between Xi Jinping and President Trump before the end of the year. One is at the APEC summit in Shenzhen in November, and the other is the G20 summit, which Trump himself will host at Mar-a-Lago in December, and so the open question in this stability formula, which the Chinese are seeking to, as it were, wrap the United States into, is to cause the United States to conclude that if they want a stable relationship for the long term, they should stop, or at least pause for a significant period of time, fresh arms sales to Taiwan. So there, that’s very much the overall framing. I’d conclude by saying this, however, if we look at outcomes, we saw no real outcomes in terms of critical minerals and rare earths. The Chinese seem to be holding that over the Americans’ head. I therefore doubt that the Americans will move in the direction of a relaxation of technology export controls. But where the Chinese, I think, may be in danger of overplaying their hand is to sustain this set of controls on critical minerals and rare earths for too long, to the point that they fundamentally alienate the president of the United States. And if they fail to deliver further relief to the United States at a level of agricultural imports from America to China, in order to relieve political pressure on the president and the red states, which are now under contention across the Midwest, everywhere from Oklahoma through Nebraska, through Ohio and Iowa, and other points in between, where the farm sector is hurting through a combination of increased input prices, including fuel, and depressed agricultural prices because the Chinese are not buying the soybeans and other products they bought before. And there’s a danger that if the Chinese overplay their leverage hand, their strategic stability hand, they may in fact induce a significant presidential reaction—not this year, but perhaps post-midterms and into next year. I’ll leave my comments there, Neil, and look forward to what other colleagues have got to contribute to the conversation.
Neil Thomas: Thank you, Kevin, for a tour de force overview of the Trump-Xi summit. I think you’re right to end on the importance there of the trade truce and the economic focus of many of the discussions. I’d like to turn to you now, Wendy, as a former U.S. trade negotiator. Right before Trump and Xi met, Scott Bessent announced that the U.S.-China trade truce would be extended by just two months, from November the 10th to January the 10th. But in the days following the summit, we got a much longer list of deliverables, including the operationalization of the Board of Investment and the Board of Trade. The latter is said to have facilitated promises of tariff relief for $30 billion worth of imports from each country to the other. So, I’d love for you to just give your read of the economic state of the relationship, what the summit achieved, and how meaningful do you see those deliverables as being going forward?
Wendy Cutler: Well, thanks. I think my takeaway would be that the economic deliverables were pretty modest, and frankly, there wasn’t a whole lot of urgency to them either. Now, as you mentioned, Neil, leading into the actual summit meeting, both sides had agreed on a two-month extension of the trade truce. That was actually much shorter than Ambassador Greer had been talking about, and I think this is a recognition on the U.S. side that shorter extensions could provide some leverage to the U.S. to get China to live up to its commitments with respect to agricultural purchases, but also with respect to resuming full shipments of critical minerals and magnets. And so we’ll have to see how this plays out over the next two months, but I would expect the U.S. to use these two months to really try and put the pressure on China. The question is really how much leverage do they have here? Another outcome we focused on is this tariff reduction package, $30 billion each way of tariffs that will be reduced to the MFN level for each side, which should help facilitate trade in these non-sensitive products. But here again, you know the levels are so low compared to our overall trade, and frankly, more and more of our trade is falling into the sensitive basket. I would also note that before these tariff reductions can even come into place, both sides will need to go through their domestic procedures. For the U.S., I think this means that we’ll go out for public comment and get comments in and consider them. So this may be a month or two before these tariff reductions can even take place, and then finally, I would just note that I had expected we’d see some big agricultural package announcement along the lines of what Kevin was hinting at—that this is very important for the president—but it does seem that China is way behind in its non-soybean agricultural purchases. The U.S. had announced last spring that China had agreed to $17 billion of additional agricultural purchases, and there’s not a lot of signs that these purchases are moving robustly. Also, under the Board of Trade, the two sides announced a working group on agriculture, and my view is: a working group? We know what the issues are, we know what the problems are, and so I would have expected that they could have announced some real concrete outcomes to deal with some of these non-tariff measures, whether they’re with respect to registration of plants or specific product standards, etc. So let me leave it there.
Neil Thomas: Just a quick follow-up there. Given those issues you raised, what do you think is possible for negotiations before January the 10th, this new deadline? I mean, what’s the next deal going to look like, if indeed you think there could be one?
Wendy Cutler: Yeah. So my view is the deal is going to have to involve resumed shipments of critical minerals and magnets where the U.S. feels that China is living up to that obligation, plus additional announcements by China of agricultural purchases. I didn’t even mention coal purchases, which were announced by the U.S. this week. China’s silent on that. Will we see those purchases be fulfilled? So again, I think China has some homework to do when it goes home.
Neil Thomas: We’ve also talked a lot about critical minerals already, and you know one of the reasons why critical minerals are so central and so important is the role that they play in, amongst many other supply chains, supply chains for chips that are driving the AI revolution, which is driving the U.S. economy and stock market more broadly right now. So I want to turn to Paul now to get your thoughts on the AI dynamics at the Trump-Xi summit, and we saw President Xi repeatedly emphasize AI safety and the importance of keeping AI under human control, even proposing that the U.S. and China jointly manage the risks of AI being misused or used by malign actors. But we’ve seen at the same time President Trump emphasize that the most important thing to do is win the AI race, and there didn’t seem to be a meeting of minds on this, despite the announcement of a U.S.-China AI dialogue. So I’m curious as to whether you think there’s enough overlap between the two presidents’ approaches to support an AI dialogue or even AI cooperation that actually becomes more meaningful over time. Where do you think we’re at with that?
Paul Triolo: Thanks, Neil. Great question. So, look, I think this is one of the toughest questions that we’re dealing with here. Both governments have never really dealt with this issue of how to govern AI models domestically. It’s a new issue, so having a dialogue on this at the government-to-government level is really complicated. This is one of the most complex issues that I think any governments have ever dealt with at the bilateral level. So I think it’s important to note a couple things. One is that the two governments have sort of been going in different directions here, particularly since July. Xi raised this issue of AI safety, for example, at the World AI Conference that I attended, and it’s a big issue because Trump has not really raised this issue of AI safety. I was there when Max Tegmark, who’s a big proponent of AI safety, he said he could have written Xi’s comments at the summit here. So it’s a big deal here. At the same time, you have the leader of an AI superpower making comments about AI safety that are important, while Trump has said nothing on this issue, and he’s continued to use the language of AI dominance, winning the race. He keeps repeating, you know, whoever wins superintelligence wins. So that’s really important to note. Then in early May, both sides were definitely concerned enough about the AI issue that they agreed to these talks about AI governance of frontier models. And this was at a time when the U.S. rhetoric was still around the idea that regulation is not needed, and so the sort of contradiction here is the U.S. has agreed to these talks with China, and many believe that these should be a prelude to having some level of AI governance at the international level. But just last week, OSTP Director Michael Kratsios again reiterated this idea that the U.S. government does not want any international governance of AI. So you have this very complicated situation where the industry itself and many of the leading AI researchers, including people like Dario Amodei, the CEO of Anthropic, are calling for the government to develop the capacity to regulate this sector and are putting pressure on the Trump administration to do this. Under the Biden administration, there was probably going to be, for example, development of a government regulatory body to oversee the sector, and now, of course, we have the influence of the tech industry. People like David Sacks, who are pushing for light regulation of the industry, and others, including you know the developers of AI themselves, who are saying the government should regulate this. In China, we have a similar dynamic where the government has some basic controls on AI, but really hasn’t regulated the industry heavily, and particularly in those areas that are of highest concern, like cybersecurity and biosecurity. So, as the two sides prepare for this dialogue, which we’ll see in two months now in Shenzhen, the next two months are going to be critical to see, you know, what the agenda is. I agree with Kevin. This is not a negotiation yet. This is just a discussion about the scope of these talks. Eventually, at some point, I think there’s hope that there could be some agreement between the U.S. and China on sort of basic hygiene around frontier AI models. But before that can happen, both countries need to get their own houses in order here, and probably over the next two months we’ll see, for example, a U.S. move to set up a so-called self-regulatory organization around AI that’s under much discussion within the administration, and we’ll probably see a similar move on the part of China because really, you know, having Secretary Bessent and Vice Premier He Lifeng as the leads on AI may not be the optimal arrangement for achieving the best outcomes here because both of those individuals have full-time jobs, and this really requires a long-term, focused commitment to determining what the government role is going to be around AI safety and how both governments can agree on some baseline going forward because the industry is calling for this and the urgency around this issue in the wake of the Hugging Face/OpenAI incident involving swarms of agents hacking various parts of the internet has only increased the urgency around this issue. So it’s great that the two sides are having a dialogue, but the structural issues on both sides have to be resolved before I think we can make progress on this.
Neil Thomas: Thank you, Paul. Fantastic analysis. Obviously, a precondition for having these not negotiations but discussions is people-to-people exchanges between the U.S. and China, which obviously during the COVID era were themselves in question, and there’s still you know lingering security and other concerns there. As part of Xi’s visit, he announced that China will invite 100,000 young Americans to study and participate in exchanges in China over the next five years. It’s an increase from a previous goal of 50,000 that he announced the last time he was in the United States, I think. So I want to ask you, Amy, how significant do you think that commitment is, and what would need to happen on both sides of the Pacific for it to actually translate into a genuine rebuilding of people-to-people ties? And why do these matter for the future of U.S.-China relations?
Amy Celico: Well, great to be with everybody. And just to answer the last part of that question, Neil: as we just heard from Kevin, Wendy, and Paul, it is so difficult to make incremental progress on political, trade, and technology issues in the overall relationship. We really do want to be able to rely on this foundation that has long existed between the U.S. and China of scholarly and research exchanges, athletic exchanges, civil society, and public policy discussions at the Track 1.5 and Track 2 levels. They’re so important to undergird a relationship that’s facing so much tension, and so in that spirit, you know, both President Trump and President Xi during the visit talked about the important history that the United States and China have of cooperation together. What was unfortunate, I think, was that the visit didn’t go far enough. They were mainly talking about history rather than the here and now and the things that are necessary to continue to promote those same levels of exchange in the future. I was in the room when President Xi announced in San Francisco the goal of welcoming 50,000 Americans, young Americans, to visit China, and China announced within five years that they had met that goal. His announcement in Washington last week was that China now wants to welcome 100,000 Americans over the next five years to visit China and engage in academic exchange. But we didn’t see much progress during the visit on the foundation needed to do that. So while Schwarzman Scholars is a program that is stronger than ever, starting our 11th year this fall, we have 150 Scholars, 40% of them Americans, and so that is a stake in the ground—a great place for scholarly exchange and learning about China and the world. It gives Americans firsthand experience, but what we didn’t hear about at the summit were more opportunities for programs like that. And so, on the U.S. side, no expansion of, for example, the Fulbright Scholarship Program; no reannouncement of Boren Scholarships; no increase in American institutions setting up operations in China; and no loosening of visa restrictions to welcome Chinese citizens to the United States for scholarly exchange, and so while the talk was positive, we didn’t see enough to actually move the needle to really deal with the fundamental issue that people-to-people exchange tries to deal with, and that is building trust, really developing people in both countries who understand one another, understand the challenges of the relationship, and then can deal with those challenges from a foundation of knowledge, and that’s why we want to see more of this in the future. But I think the exchange between our top leaders, between President Trump and President Xi, has underscored how important that personal relationship is to high-level diplomacy, as are the relationships among trade officials and among officials working on artificial intelligence and law enforcement collaboration. So, at the official level, we are seeing exchange, but again, it’s limited if it isn’t also expanded to more Americans and Chinese having opportunities to really understand one another and grapple with the real challenges in the relationship together.
Neil Thomas: Thank you, Amy. Before we zoom out to some big-picture questions on U.S.-China relations, I want to turn to Kevin for a question that I think has really been overlooked in a lot of the analysis in both Washington and Beijing, which I think is incredibly important. U.S.-China relations do not happen in a vacuum. There’s a whole wider world out there. As a former prime minister of Australia, I’m curious: what do you think this summit looks like from Canberra’s vantage point, but also the vantage points of other regional capitals—Tokyo, Seoul, Manila—especially other U.S. allies and partners. Is it creating reassurance that Trump and Xi can manage the U.S.-China relationship in a stable manner, or is there also anxiety being created that Washington might be reaching agreements or doing deals with Beijing that don’t consult countries in the region?
Kevin Rudd: I think I’ll make my comments, Neil, in two or three levels, one is on the stability question, two is on the Taiwan and geopolitics question, and three is on the whither AI question. And these three sets of considerations will animate capitals differently around the Indo-Pacific and around the world. First, on the stability question, as Winston Churchill once said, “Always better to jaw-jaw than to war-war.” Therefore, the fact that there is a more stable framework and relatively positive personal dynamic between the United States and China, and between the two leaders is generally welcomed. That is, a level of stability at the U.S.-China relationship level is more helpful in other countries navigating what is otherwise normally a binary choice. That is, are you going with Beijing? Are you going to go with Washington? And therefore, this creates some more space for countries around the region and the world to be balanced in their approach to these dynamics. The overall global dynamic, as you know full well from your own experience, Neil, is along these lines. America is the overwhelmingly preferred security partner of countries across the Indo-Pacific, and of course in the Euro-Atlantic. At the same time, China looms as the dominant economic partner, at least as far as trade is concerned, not in terms of investment flows necessarily. That changes from country to country, depending on the historical stock and flow of U.S. FDI, as well as the question of technology flows between China and the United States as well. So at that level, there will be, I think, a level of welcoming of the fact that this relationship is more stable than it was at a time when darts were being thrown on a regular basis between both capitals, if you look back at the history of the last five to 10 years. The second point pushes in the reverse direction, which is on the Taiwan question, and this goes in particular to Japanese sensitivities, but other sensitivities across the rest of the region as well, and that is if U.S. arms supplies continue to be held up in their delivery to Taiwan, and given President Trump’s broader statements about Taiwan following the president’s last visit to China in his famous Bret Baier interview on Fox, where he described Taiwan as 9,500 miles away from the United States, 59 miles away from China. The Taiwanese stole all of our semiconductors, and their leadership really needs to behave better. These remarks have not been seen as enormously positive by Taiwan’s friends, partners, and de facto allies, and therefore the reaction I think in a number of regional capitals, most particularly in Northeast Asia, will be one of continuing anxiety about where the administration finally lands on Taiwan’s strategy in general, arms sales in particular, and furthermore whether Xi Jinping concludes in response to that a strategic window begins to open for himself to take hard-line military action against the island. That’s the second set of points. The third is AI, which affects every country in the world. The reality, Neil, is that this is now a two-horse race. That is, it’s China and the United States, and they are a long way ahead. I saw a wonderful illustration of this the other day, which has a race meet around an athletic track with Team America, with you know five major companies out front with both OpenAI and Anthropic at the head of the American race, with Microsoft, Meta, and Google coming up in the middle of the field, and then you’ve got the Red Four on the other side of the athletic field with Zhipu AI and of course DeepSeek and Huawei and ByteDance also struggling towards the finish line. That’s kind of the reality, of course. In this wonderful cartoon, just ahead of the straining and competing athletes was a giant chasm they’re all about to roll into, which is called an AI crisis brought about by an AI incident through agentic AI beginning to act autonomously against the infrastructures of both countries without the authorization of either state or anyone in particular. So, what’s the view from the lens of the rest of Asia and the rest of the world on basic questions of a guardrail which could reduce the risk of a major attack by a third party, a rogue actor, a rogue state, or by a rogue agent—that is, an autonomously performing AI agent—the anxiety from the rest of the world is that no form of global governance at this stage will substitute for a bilateral protocol between Beijing and the United States on reducing the risk of any of these three sets of crises breaking out into the real infrastructure world. And so, if all that sounds too abstract, could an AI agent take out your water supply system? Could it take out your power supply system? Could it penetrate and take control of data in your military infrastructure? Could you begin to lose political control of your system through the sudden circulation of highly sensitive material about, for example, the Chinese leadership internally? And how does that impact third countries in terms of parallel considerations for themselves? That’s the third set of concerns, and those are ongoing until we see whether there is form and substance or meat and potatoes when it comes to the AI track, which has been opened between He Lifeng and Scott Bessent, back to you.
Neil Thomas: Fantastic, thank you, Kevin. Paul, I wonder if you want to come in on that AI risk scenario that Kevin was mentioning, given your expertise here. And do you see that as something that could bring the U.S. and China together and kind of force action on this issue, as Kevin was intimating, or what’s your kind of reaction to the way forward here?
Paul Triolo: Yeah, I agree with Kevin on all points here. I think the challenge, as I tried to raise earlier, is that you know we’re in this crazy situation where now that everybody understands the threats, the potential threats from advanced AI, from things like swarms of agents, and from the misuse of advanced models by non-state actors. We’re still in a situation where both countries are still some ways from being able to put in place clear regulatory guardrails around the release of advanced models in their own countries, and so I think the sense of urgency is good because I think that’s what’s driven this whole agreement between the two countries, which wasn’t there two years ago when some initial AI discussions were mooted, but it doesn’t make it any easier because now both countries are scrambling to get their head around this issue in the midst of a much more complicated situation, right? Where any day now we could have an incident come to light where agents have gone rogue, or malicious actors are trying to use these capabilities for cyber- or bio-related reasons here. So that gives urgency, but it doesn’t make the discussions any easier. I think the incident reporting mechanism that was mooted by Secretary Bessent is really a good place to start here, and that’s something that you can imagine if the OpenAI agents had hacked into a Chinese website or Chinese critical infrastructure, how would that have been handled by both governments, right? There’s no real mechanism for that, so I think that’s a great start, but it’s still not easy to do that because in both countries there still isn’t a robust incident reporting mechanism between the leading AI labs, for example, and the government, as we saw quite clearly with the OpenAI and Hugging Face incident, where you know the incident reporting was Hugging Face going to the media and saying, “Look, we’ve been hacked by swarms of agents,” and then OpenAI figuring out that it was their own agents. They weren’t aware of that when Hugging Face went public with this. So I think that, if anything, the impetus is there now to begin with a basic incident reporting mechanism, and do that first domestically, and then bilaterally, and then build on that. The issue of you know how to deal with non-state actors’ access to these capabilities is going to become more salient. But that will again require a really strong regulatory structure developed in both countries. It’s almost criminal in my mind that, for example, the Chinese government has not mandated that its leading AI labs have safety testing teams, which is a huge issue. All the U.S. labs—it’s not mandatory—but they’ve all developed very good internal capabilities to at least test these models. They’re not perfect, obviously, as we’ve seen, but they’ve taken these issues very seriously. But in China, probably only Zhipu AI and Alibaba, for example, have really robust safety testing teams, and then the complication is that all the labs in China are short of compute to devote to AI safety because of U.S. export controls. Getting back to Kevin’s original statement there, so I think this issue needs to be on the table: how does the U.S. regulate compute in an era where advanced compute is needed to do AI safety testing? I’ve advocated for a complete rethink of the U.S. technology control policy that’s fit for the age of superintelligent agentic AI. This is something that I think is critical, and we’re not quite there yet. But I think I agree with Kevin that these issues are all on the table. What might be the real trigger is a big event, you know, major event where we do have an incident where we have damage to infrastructure or loss of life that then really focuses governments in both capitals to really get moving on this.
Neil Thomas: We just saw today that OpenAI has delayed the launch of its most recent model because of safety concerns. So hopefully, this can be a subject of robust discussions in the next meeting of the U.S.-China AI dialogue. Looks like it’s going to happen in Shenzhen within the next couple of months. There’s obviously so much to talk about here. We are getting close to time, so I just want to turn to Wendy, then Amy, then back to Paul and Kevin for a couple of minutes on your thoughts—however you want to take it—on what I think is really the big strategic question hanging over the Trump-Xi summit and the APEC and G20 meetings that are coming over the next couple of months. That would produce, I think, an all-time record of four face-to-face meetings between the U.S. and Chinese presidents in one calendar year. My question is: Do you see this as the beginning of a more durable, long-term framework for managing U.S.-China competition, or do you think the current stability is more of a temporary situation that is likely to eventually give way to renewed confrontation? So start with you, Wendy. Just a minute or two each. Yeah.
Wendy Cutler: So you know, in my view, this truce is very fragile, and I think we saw that even in the lead-up to this current meeting, where each side is just announcing measures against the other side, but not crossing the line, right, and so I think they’re testing each other. So even with this truce, we’re seeing tension and each side taking measures. Second, there’s always the unexpected, and we’ve seen that in the past—some development that could totally blow up the relationship. But what also concerns me is that if China is not living up to its commitments under this truce, then that’s going to put increasing pressure on the U.S. to respond. The Trump administration is not shy about taking on other countries when they’re not living up to their obligations. But here, it’s just more complicated because of China’s hold on critical minerals, but you know I think for the remainder of the year we’re okay because there’ll be two more meetings between the leaders and that will help keep tensions from boiling too high, but I worry about next year and particularly after the midterm elections when Congress may also get more active on this front and give legislation to the president to sign, which could be considerably more hard-line than the president would like to pursue.
Neil Thomas: Thank you, Wendy. Amy, your thoughts?
Amy Celico: Yeah, I agree. I don’t see anything durable coming out of what we’ve experienced so far. But of course, I think given potentially two more opportunities for engagement this year alone, that does give us some short-term stability that I hope we can take advantage of with the next two meetings to really put some specificity again around issues that aren’t as contentious, and I really do put the bucket of issues around people-to-people exchange there because the goal of people-to-people exchange is to take out this over-securitization of every aspect of the bilateral relationship, and remind people in both countries that it’s in our national interest to understand one another, and you can only do that by bringing people together in real ways. And so, we have two more opportunities this year to put more specificity around programs that already exist, Schwarzman Scholars again really does prepare the next generation of young people to disagree with one another through really being together, learning about China, about political and cultural differences, and then applying it in whatever you do. We need more of that, and I do think two more meetings this year give us an opportunity for the U.S. and China to put some meat on the bones of how we can engage with one another, not just on the difficult issues, but on the ones that undergird the relationship.
Neil Thomas: Great, thank you, Amy. Paul, your quick thoughts, and then sure, Kevin, give you the last word.
Paul Triolo: Yeah, just a couple things quickly. I think this “constructive, strategic, stable” formulation is really fragile. I agree with Wendy. On the constructive side, there was no Chinese business delegation at the White House, including Chinese AI and EV CEOs that had been mooted as participating, and so on the strategic side, the issue really is this extension of Busan and the rare earth and critical minerals issue that both Kevin and Wendy have stressed here, and the Chinese view is that if that extension is not to the end of the Trump administration, then what is strategic about it? Where is the strategic angle here, and where is the stability? If we’re going to be revisiting this every so often, my view on the rare earth issue is a little more nuanced and complicated. China is definitely issuing licenses, for example. We work with these issues every day, so we see things pretty close up. I think Bessent and Greer have even said that something like two-thirds of the licenses are being issued. Are there delays? Yes, MOFCOM is very focused on potential for diversion and stockpiling, and is requiring a lot of documentation around this. But the big issue I think that people are hung up on is licenses for military and defense-industrial end users, and there, China is not letting up on that. There have been zero licenses issued in that area. I think the Trump administration is under the assumption that China would return to the flows of rare earths and critical minerals and magnets that existed before April 2025. But the Chinese government does not believe that’s what it agreed to in Busan. And then finally, I think that as we saw today with Ambassador Perdue, the U.S. side is very focused on the potential for the October 2025 rare earth measures going into effect. Those have extraterritorial and de minimis provisions, which would be a huge disruption to the industry, and also include expansion of controls over things like erbium, which is critical for fiber optic communication. And then Perdue is linking these with State Council Decrees No. 834 and 835, which I think is a misread. He’s associating those with a sort of broader Chinese effort to use and escalate on rare earths. Those decrees, I don’t think, really have anything to do with rare earths. They’re part of a broader set of legal measures that Beijing has put in place to use in case it needs to, but there’s a lot of obsession within the Trump administration about those measures as escalatory and actually violating the Busan agreement. So I think in the next two months there need to be discussions about the rare earth licensing issue and how to deal with things like the State Council Decrees No. 834 and 835 and how to think about those because I think there are misconceptions on both sides about what was agreed to and what was not agreed to, and they’re going to have to come to some agreement on this. Otherwise, this issue is going to continue to dog the relationship. It dominated every trade discussion last year, and it has continued to dominate the discussion behind the scenes. Not so much front and center at the summit, but definitely behind the scenes, and, as I say, we’re living this every day with our clients trying to understand where China is and where the U.S. is, and finally, there are no alternatives to these materials coming online anytime soon. And so U.S. companies across many sectors are going to need to maintain access to these materials, particularly for semiconductors and autos.
Neil Thomas: Thank you, Paul. Over to you, Kevin.
Kevin Rudd: One minute after the hour, I will conclude with three haiku points. One, this will be fragile because strategic competition is the operational strategy of both sides in terms of which country emerges as the dominant power in the Indo-Pacific in the 21st century and globally. The question is whether it’s managed strategic competition or unmanaged strategic competition on the way through. Two, there is the danger of Chinese overreach, as I indicated in my earlier remarks, both on trade in general, agricultural trade in particular, and most specifically of all, critical minerals, rare earths, and magnets, and the risk of that inviting, in fact, the sort of reaction against the Chinese system that we saw in Trump 1.0 once we got through the midpoint of that administration. And three, AI: the Chinese system, for the reasons which Paul just referred to, given the absence of its own testing protocols in its labs on its own frontier models, needs to buckle up, as do the rest of us, for a real-world incident of an order of magnitude between now and the end of the year, perhaps before these leaders meet again, either in Shenzhen, China’s AI capital, or at Mar-a-Lago. I’ll leave my comments there and say goodbye to everybody.
Neil Thomas: Thank you, Kevin. Thank you, Wendy. Thank you, Amy. Thank you, Paul. And thank you, everyone, for joining us.