Trump-Xi Summit: Can US-China Avoid the Thucydides Trap? 5 Key Takeaways

The much-awaited summit between the world's two largest economies, the US and China, has commenced as President Trump welcomed Chinese leader Xi Jinping in the White House. Trump called it a "great meeting" on the first day. The two leaders discussed trade opportunities while shying away from expressing opinions over issues like Taiwan independence and Iran conflict. Though both the leaders held their own diverged views on key topics like artificial intelligence.

While keeping details of the meeting discreet, Trump told reporters, "We had a great meeting." Meanwhile, Xi emphasized that both countries to avoid the "Thucydides Trap," which is a term usually referred to the ideology of when a rising power threatens to displace an established one. The result is often war.

Xi's message was subtle, but at a time when the USA is in a six-month-long war with Iran and the peace seems distant than ever, creating uncertainties for global economies.

The Chinese president said, "It should be a race of catching up with one another, not a wrestle in which one either wins or loses," adding that both the US and China are deeply interconnected and they should rather engage in "healthy" competition that is respected within bounds.

Can both the USA and China avoid Thucydides' Trap? The answer is unclear or precisely not given!

However, here are five key takeaways from the summit:

1. Trade Deal

Since the time Trump took power of the White House in 2024, he has gone on a spree of imposing tariffs on countries, including China, which has retorted back as well. The two have engaged in throwing hefty to extraordinarily high import tariffs on each other, sparking global trade tensions.

Despite their polar-opposite views, the two countries have decided to dial back on tariffs and extended a trade peace this week.

The US Treasury Secretary Scott Bessent revealed that both the countries have agreed to extend their latest trade agreement by another two months. Last year, the two countries had decided on trade deals which was due to expire in November.

He added, the new extension of 2 months will give Washington and Beijing "more time to see what we can do on the economic front."

Although the 60-days extension seems fair, it also pushes key concerns such as tariffs, Chinese purchases, rare-earth supplies and technology restrictions to the next round of negotiations.

According to Bessent, China is meeting their requirement of purchasing 25 million tons of soybeans, which was discussed in their earlier agreement. However, Beijing looked reluctant to pledge $17 billion in other agricultural goods. Also, rare-earth deliveries were ⁠also falling short.

This showcased that instability persisted even when tariff rates are lower for now.

2. Iran Conflict

Although Xi looked forward to improving relations between the two behemoth countries, the war in Middle East also emerged into the meeting.

Trump boldly called China to support US in insolating Iran economically and reopening the Strait of Hormuz. China is Iran's largest and long-standing trading partner.

The awkwardness was felt as Xi hesitated to get involved in the discussion of Tehran.

US along with Israel had declared war against Iran in late-February with Operation Fury. However, while Israel dialed down in its assault on Iranian soils, US has continued to bombard the Islamic Republic. This has hampered global oil and gas supply at the Gulf, fueling energy crisis and inflationary pressures across the world, forcing central banks to tighten their policy stance.

3. Taiwan Issue

If Xi was hesitant to respond on the Iran issue, he was expecting Trump to handle the Taiwan question with prudence. As per reports, Xi hoped the US would oppose Taiwan's independence.

There was no immediate White House readout of the exchange, but US officials have long avoided explicitly stating opposition to Taiwanese independence. Any shift in language would raise questions about Washington's resolve to defend the island and provoke opposition in Congress, as per Reuters.

The China and Taiwan relations have been complicated and controversial since World War 2. The Taiwanese land has been a very sensitive topic for Beijing, who claimed Taiwan has been theirs since ancient times.

Taiwan, which was briefly its own province under the Qing dynasty between 1885 and 1895, was overtaken by Japan after a war. However, Japan handed over Taiwan to China after World War 2. But the Taiwanese government believes in their independence and rejects China's sovereignty over them.

Earlier this month, Trump's administration had approved a $11 billion arms deal package to Taiwan.

4. Split Opinion On AI

Both have shown different opinions on artificial intelligence. Trump believes AI should be called superintelligence, or SI. But Xi believes leading nations like the two countries must manage AI growth.

"We have both the capability and responsibility ​to develop and manage AI for good and ensure that the development of AI is always under human control and serves the well-being of the people," Xi added.

5. Strategic Risk

Referring back to the Thucydides Trap term, Xi argues that both nations stand to win from cooperation but lose from confrontation. Hence, Xi proposed regular military dialogues between the two and stronger crisis-prevention mechanisms.

Along similar lines, Trump also emphasized on the potential perks of cooperation. He said the two countries can accomplish by pursuing common interests, which invokes their wartime alliance against Japan.