US-China leverage shift and summit outlook (with Stephanie Flanders)

Jennifer Welch

The meeting is likely to go forward as planned because it's a low-cost way for both sides to maintain stability, despite headwinds from the Iran war and energy disruptions.

China is not happy about the blockade affecting its energy imports, US sanctions on its refineries, or hosting a summit during a US military campaign, but sees significant costs to canceling.

Jennifer Welch

The shift in leverage between the US and China over the last year is underscored by China's use of its grip over critical minerals to push Washington toward negotiations.

China's trump card had a psychological effect on Washington, and Beijing continues to gather data on critical mineral usage, which it could quickly use again if its interests are not respected.

Jennifer Welch

4% of US GDP ($1.2 trillion) is implicated in rare earths, with 1.5% being non-substitutable from China, showing why this leverage is so important.

Research by Nicole Gotten Caretelian and Chris Kennedy shows the deep integration of rare earths in the US economy.

Jennifer Welch

The summit ambition is relatively low, with deliverables like soybean purchases still pending execution; China has bought 12 million metric tons but owes 25 million by year-end.

China may delay orders to maintain leverage, and Congress could restrain Trump on issues like Chinese vehicles.

Jennifer Welch

It is now rare for US presidents to visit China; Trump might be the last for some time due to bipartisan views of China as a strategic rival.

Neither party is likely to give China the opportunity to project global clout through a visit.

Jennifer Welch

Normally both sides create proper conditions before a summit, but the Trump administration prioritized the Iran war over China concerns, making China collateral damage.

Beijing responds by using blocking rules and hosting Iran's foreign minister, creating friction points that could speed bump the meeting.

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