Foreign Affairs
America Has Lost Its Leverage Over China
How Trump and Xi Could Cement Beijing’s Advantage for Years to Come
Henrietta Levin
May 13, 2026
A Chinese national flag in Beijing, May 2026
Maxim Shemetov / Reuters
HENRIETTA LEVIN is a Senior Fellow with the Center for Strategic and International Studies. She previously held senior positions at the U.S. Department of State and the National Security Council.
The past year of U.S.-Chinese relations has been extraordinary and head-spinning. In the spring of 2025, U.S. President Donald Trump imposed a de facto trade embargo on China, a measure swiftly reciprocated by Beijing. Months later, he was touting a “G-2” partnership between the two countries. In recent weeks, Trump has both invited Chinese warships to the Strait of Hormuz and threatened to strike China-bound oil tankers passing through it.
But the world’s most important bilateral relationship has also changed in more consequential and persistent ways. China has quietly established authority over whether and how the United States will implement national security measures such as export controls. Stylistic changes in how the United States conducts diplomacy with China have allowed Beijing to gain the upper hand in pushing for high-stakes policy concessions. And Washington has separated its diplomacy with Beijing from efforts to compete for influence globally, resulting in a deprioritization of critical strategic issues and enabling China to weaponize the appearance of U.S.-Chinese rapprochement. These subtle changes in U.S.-Chinese relations may constrain decision-making in Washington for years to come.
When Trump meets with Xi in Beijing this week, the two leaders are unlikely to achieve major policy breakthroughs. But they will reinforce a new set of implicit rules and assumptions for managing relations that ultimately favor China, which may embolden Beijing to test American resolve on Taiwan, the protection of cutting-edge technology, and other vital interests. This, in turn, will complicate Washington’s ability to preserve the bilateral stability it has gone to great lengths to secure.
BEIJING’S NEW VETO
China emerged from the 2025 trade war in a position of relative strength. As tensions escalated in early 2025, strategists in Beijing argued that disruptions would hurt China but that they would hurt the United States more. As predicted, after Beijing blocked exports of key rare-earth elements and critical minerals, threatening the viability of U.S. manufacturing, the Trump administration quickly sought an off-ramp from the trade war it had launched. Chinese officials saw their assumptions vindicated. Their confidence soared. An earlier wariness of Trump’s unpredictability gave way to near certainty that Beijing could manipulate his administration with ease. Chinese officials concluded that they could negotiate with the United States on equal footing and that, if anything, China held the stronger hand.
In the aftermath of the trade war, both sides refocused on the ostensibly technical task of unwinding the most damaging retaliatory measures they had imposed. The United States shelved structural concerns regarding China’s nonmarket policies and resulting trade imbalances that the tariffs were originally meant to address. But the final arrangements, endorsed by Trump and Xi in October 2025 at their summit in Busan, South Korea, still revealed significant changes to the character of U.S.-Chinese relations. China paused its most sweeping controls on rare earths and critical minerals. In exchange, Washington ceded to Beijing an effective veto over whether and how the United States would protect itself from certain national security threats.
As part of this deal, the United States withdrew a new regulation that would have applied export controls to the subsidiaries of entities that had already been sanctioned, closing a loophole that was used to circumvent the ban on advanced semiconductor sales to China. In one fell swoop, Beijing had asserted authority over the degree to which the United States would enforce all of its existing national security measures that drew on export controls, whether they targeted China or not. Additionally, the United States agreed to forgo new export controls that specifically targeted Chinese entities.
China emerged from the 2025 trade war in a position of relative strength.
Such a trade would have been unthinkable a year earlier. The first Trump administration and the Biden administration had used export controls to address a wide array of challenges, including the Chinese military’s weaponization of U.S. technology, Beijing’s support for Russia’s war in Ukraine, and human rights abuses in Xinjiang. These measures prevented China from easily drawing on U.S. capabilities to undermine American interests and values. The second Trump administration quietly set this tool aside.
The United States and China routinely discuss national security concerns, but in the past, how Washington addressed those concerns was not up for negotiation. The United States might ultimately decide not to act on a particular threat, but neither side would have expected China to hold explicit authority over how U.S. officials would proceed. Now Beijing gets a vote.
To some observers, this represents a diplomatic breakthrough similar to the nuclear arms control negotiations of the Cold War. After China and the United States teetered on the edge of mutually assured economic destruction, the two sides successfully pulled back from the brink. The Busan deal, however, lacks the symmetry of the twentieth-century disarmament treaties, in which identical military capabilities were subject to reciprocal restraint. Instead, China withdrew one weapon—its most severe restrictions on rare-earth exports—in exchange for the United States refraining from export controls in all domains, including technology, cybersecurity, and nonproliferation. The imbalance in this arrangement has strengthened China’s overall position within the bilateral relationship. And because it is explicitly linked to China’s chokehold over rare earths, which the United States will need for some time, current and future U.S. policymakers may find it difficult to reestablish a more favorable foundation for U.S.-Chinese stability.
OPTICS OVER SUBSTANCE
Preparations for the upcoming summit between the two countries’ leaders reveal further important changes in U.S.-Chinese relations. In the lead-up to bilateral summits, both sides have always cared a great deal about the meeting’s pageantry and symbolism, as well as its substantive agenda. But in the past, Chinese diplomats were generally more focused on atmosphere, while U.S. officials prioritized more specific policy objectives. These differences facilitated successful negotiations by allowing both sides to offer concessions on how meetings would be structured without compromising on their top goals. The United States might be able to offer a gesture of respect—a longer or more elaborate meal, for example—to unlock Chinese support for a more concrete policy change, such as enhanced military-to-military communication.
Now these roles have reversed. Washington must deliver on Trump’s overriding desire for visibly warm ties with Xi. In response, Beijing sees a unique opportunity to draw from the U.S. playbook, trading optics for substance in pursuit of concessions on its foremost strategic priority, Taiwan. Chinese officials will surely present Trump with an elaborate display of pomp and circumstance, but they will expect him to return the favor in his policy agenda, potentially by softening U.S. support for Taiwan.
Ahead of prior summits, the United States often divided its priorities into areas of potential cooperation, such as counternarcotics and people-to-people ties, and areas of difference, such as Taiwan and the war in Ukraine. This gave structure to a sprawling bilateral agenda. Areas of cooperation merited negotiation, whereas areas of difference required discussion. The goal in the first instance was to establish a common program of action. In the second, Washington sought to address misunderstandings and clarify redlines, thereby reinforcing deterrence and reducing the risk of inadvertent conflict. Washington generally preferred to address each topic as a standalone issue.
Beijing feels increasingly confident in its position within the U.S.-Chinese relationship.
China took a different approach. Its diplomats worked aggressively to link areas of cooperation and areas of difference, arguing that progress on any particular issue would be unsustainable in the absence of broader momentum and trust. China viewed cooperation as leverage. It might argue that the two sides could not make progress on stopping the flow of fentanyl precursors, for instance, while remaining far apart on Taiwan. In 2022, Beijing demonstrated with unusual clarity its view that cooperation is something to be earned through good behavior. In response to then House Speaker Nancy Pelosi’s visit to Taiwan that summer, Beijing suspended cooperation on a wide variety of unrelated issues, including counternarcotics, climate change, immigration, and military communication.
This time, the United States is trying to link disparate components of the bilateral agenda. Everything is negotiable, including matters of national security. Trump does not see any meaningful distinction between areas of cooperation and areas of difference; he appears to believe that all problems can be resolved through his personal engagement with Xi. Accordingly, Washington could conceivably entertain strategic concessions on issues that will define U.S.-Chinese competition for decades—such as Taiwan’s status or technology protections—in exchange for peripheral quick wins, such as Chinese purchases of soybeans or airplanes.
This dynamic has been reinforced by U.S. Treasury Secretary Scott Bessent’s de facto role as chief diplomat for the U.S.-Chinese relationship. In the past, primary responsibility for bilateral summitry most often rested with the national security adviser or secretary of state. These officials prioritized national security issues and were generally wary of pursuing economic goals at the expense of the United States’ strategic position. Over the years, these officials have sometimes prioritized stability over actions that would address the threats posed by Beijing, avoiding confrontational measures that could complicate U.S.-Chinese diplomacy. But even then, their sense of what mattered in U.S.-Chinese relations favored the strategic agenda.
Bessent’s Chinese counterpart is Vice Premier He Lifeng, whose responsibilities are also predominantly economic. The Chinese party-state, however, has an exceptional ability to enforce message discipline across all its cadres, and there is no doubt that He is prepared to press for wins on strategic matters alongside economic ones. This imbalance leaves the United States vulnerable to emerging from this and future summits with bad deals.
SEPARATE TRACKS
In another significant change, it appears that Washington no longer sees U.S.-Chinese diplomacy as a part of its competition with Beijing for global influence. Previously, U.S. officials engaged Beijing to communicate with Chinese officials, but also as a form of alliance management. Diplomacy with China was intended to reinforce U.S. ties with partners while countering Chinese efforts to weaken them. In meetings with China, for instance, prior U.S. administrations would raise concerns regarding Beijing’s aggression in the East China Sea. They did this to deter further coercion against Japan, but perhaps more important, Washington could tell Japan afterward that it had raised the issue. This reassured allies that Washington valued them enough to carry their priorities to Beijing.
At the same time, Washington used the content and pace of U.S.-Chinese diplomacy to reassure partners that the United States would not recklessly escalate tensions with China, nor would it reconcile irresponsibly with Beijing. This message was vital for building trust with partners that feared, on the one hand, U.S.-Chinese tensions spilling into conflict, and on the other, Washington and Beijing cutting a deal at other countries’ expense. Countries in Asia do not want the United States to escalate tensions over Taiwan to the point that conflict becomes more likely. Yet they also do not want the United States to reach a deal with China that would allow the mainland to more easily establish control of the island, which would pave the way for Chinese dominance of the region and constrain third countries’ freedom of action.
Now the United States has jettisoned these global considerations, preferring to manage each of its relationships as separate affairs. Even as the Trump administration has invested tremendous resources into strengthening maritime cooperation with the Philippines, for example, it has de-emphasized concerns regarding China’s aggression in the South China Sea in its high-level agenda with Beijing. Previously, Washington would have sought a mutually reinforcing coherence in its engagement with China and allies. Now those relationships are managed on entirely separate tracks. Notably, Trump’s upcoming trip to Beijing will be the first by any U.S. president since 1998 to include only meetings with Chinese counterparts, eschewing the traditional practice of traveling to allied countries as part of the same trip, or, in the case of multilateral summits, engaging allies while in China.
China, meanwhile, has skillfully wielded the appearance of rapprochement with the United States as a major tool in its own global efforts to expand Chinese influence and erode trust in the United States. This helps explain why China places such importance on persuading Trump to offer rhetorical concessions on Taiwan at the upcoming summit—encouraging him to state that the United States “opposes” Taiwan independence, in contrast to the long-standing U.S. position of “not supporting” that outcome, and that he endorses unification in some form. It is unlikely that Chinese officials believe that this language alone would have an enduring effect on U.S. security assistance to Taiwan. Nonetheless, it would undermine the Taiwanese people’s faith in the United States, weaken the standing of politicians in Taiwan who advocate closer ties with Washington, and possibly prompt other regional players, such as Japan and the Philippines, to soften their own policies in support of Taiwan. While the United States deprioritizes the international implications of its diplomacy with China, Beijing is weaponizing the appearance of U.S.-Chinese rapprochement to cast doubt on whether U.S. allies can rely on Washington to defend them at the expense of stability in the U.S.-Chinese relationship.
AN UNENVIABLE CHOICE
These structural and stylistic changes in U.S.-Chinese relations have granted Beijing more power within the relationship. Yet at the same time, Washington’s actions are not always aligned with its accommodationist messaging toward Beijing. Even as the Trump administration celebrates a “G-2” partnership with China and suggests that Taiwan arms sales are open for negotiation, in possible violation of President Ronald Reagan’s six assurances to Taiwan, U.S. military activity around Taiwan and the South China Sea remains strong. In 2025 and 2026, the United States carried out a program of multilateral military drills and freedom of navigation operations in the western Pacific. This month, it concluded the largest-ever joint military exercise with the Philippines, concentrated in northern Luzon, just south of Taiwan, and a western island adjacent to the South China Sea. The U.S. military continues to send ships and aircraft through the Taiwan Strait, and in December, the Trump administration approved an $11 billion arms-sale package for Taiwan.
Some would argue that this state of affairs reflects a clever strategy of speaking softly while carrying a big stick. But the United States is not speaking softly in its diplomacy with Beijing. It is explicitly communicating apathy on key strategic matters, notwithstanding the operational continuity that has in many cases characterized the U.S. approach to these same issues.
This divergence between word and deed raises the risk of misunderstanding, miscalculation, and unintended escalation. China is not seeking near-term military conflict with its neighbors or the United States, but its increasingly elaborate military exercises around Taiwan could easily cause an accident that leads to escalation. The Chinese coast guard’s attacks on Philippine mariners in the South China Sea could inadvertently trigger U.S. alliance commitments, leading to a great-power confrontation. Now that Washington is explicitly signaling to Beijing a lack of interest in supporting its regional allies (while in practice continuing to support them), the odds that Beijing will misread Washington’s intentions and underestimate U.S. resolve are even greater than in the past.
As Beijing feels increasingly confident in its position within the U.S.-Chinese relationship, it may be emboldened to more aggressively assert itself in the Indo-Pacific. This would force the United States to make an unenviable choice: push back, potentially sacrificing bilateral stability and risking conflict, or look the other way, allowing vital U.S. interests to erode. Because there is no good answer, the United States should strive to avoid a scenario in which it is forced to choose. This requires Washington to send clearer signals of strength, focus, and enduring commitment to its own security and that of its allies. Should Trump continue to communicate that he prizes quick wins and his relationship with Xi above deeper American interests, the United States will find itself with a diminished capacity to guide the relationship on its own terms.
Topics & Regions: United States China Diplomacy Geopolitics U.S. Foreign Policy Donald Trump Administration U.S.-Chinese Relations Xi Jinping
