U.S.-China : A new superpower détente?

SPEAKER_1 (0:00)

This is In Focus, The Hindu's Current Affairs Podcast.

Stanly Johny (0:06)

Certainly, this is not a strategic breakthrough, but at the same time, we also see that both sides have shown willingness and readiness to accommodate the others sensitivities. The United States leverage is spread across the economic domain, whereas China's leverage is concentrated in the rare earth sector, so which the Chinese are ready to weaponize. If the US is weaponizing trade, the Chinese message is that we are ready to weaponize rare earth. So, this is a mutually destructive path for both countries.

Sharmada Venkatasubramanian (0:35)

If Trump is willing to directly interact with Beijing, what does that say about the importance that it has placed over India as a counterweight in China?

Stanly Johny (0:44)

Overall, Taiwan would remain a key flashpoint, and what we have to watch out for in the coming months is whether President Trump is going to deny the 14 billion weapon sales to Taiwan, and if he does that, what impact that will have on the US-China dutongt.

Sharmada Venkatasubramanian (1:04)

Hello and welcome to another episode of the Hindus In Focus podcast. I'm Sharmada Venkatasubramanian, your host for this episode. US President Donald Trump and Chinese President Xi Jinping met last week for a summit aimed at easing tensions between the world's two largest economies. The meeting produced agreements on trade, rare earths, along with unusually warm public messaging from both sides. But major differences over Taiwan, technology and the broader strategic rivalry remain.

The summit comes at a time when Trump's approach to China appears increasingly transactional, even as Washington continues to compete with Beijing for influence across the Indo-Pacific.

It also comes at a significant moment for India with the US President stepping up engagement with China. So what did Trump and Xi actually achieve at the summit? How should we read the US's approach to Taiwan? And what does the growing engagement between Washington and Beijing mean for India? To answer all these questions and more, we are joined by Stanley Johny, the Hindu's International Affairs Editor. So welcome back to another episode of In Focus. Thank you. Let's quickly start with the summit itself. So what did the two leaders actually achieve? And how significant is this for the US-China relationship?

Stanly Johny (2:21)

If you look at the outcome of the summit, the summit was important because, you know, these two are the world's most powerful leaders, leaders of the world's biggest economies and two superpowers.

And this was the third summit after Trump came to power for his second term. And this was the second summit of the year, because in May, Trump traveled to Beijing, and now Xi Jinping went to Washington DC. So, I mean, it tells us that both leaders would prefer to stay engaged. And that's important, given the tensions as well as the cooperation, the size of the economies, etc., etc.

But at the same time, how do you assess the summit, you know? Which were the main issues here? So, let's say that there are two major wars are going on. One is the Russian invasion of Ukraine, and the other is the US attacks on Iran. And the United States and China are on opposing sides in both conflicts. So, definitely Trump and Xi talked about these two wars.

So, one is, of course, Iran, and the other is Ukraine. And then the third point is Taiwan, of course, which apparently is the most important point here.

And fourth, let's say, the trade dispute that's going on between these two countries. And fifth could be the dispute over technology, you know, or how to cooperate, how to compete in the realm of artificial intelligence and other critical technologies. And the larger point here is how to manage the relationship between these two countries. Look at them point by point. There is no breakthrough on Ukraine. There is not even a reference to Ukraine in the Chinese readout, the eight deliverables issued by the Foreign Ministry of China. There is no reference to Ukraine at all. With regard to Iran, yes, it says that both leaders have called on Iran to respect its commitments under the nuclear and its nuclear commitments and not to make a bomb, which is China's official position. And it also says that any toll on international waterways is objected by both leaders, which is a reference to Strait of Hormuz without directly referring to Strait of Hormuz. But beyond that, the Chinese have not said anything about their support for Iran or Trump has not any commitment from Xi Jinping about Iran.

And with regard to trade and artificial intelligence technology.

So with regard to trade, yes, there is some progress. One, we know that there is, you know, a trade truce going on between the two countries. And they have agreed to extend it by two more months. So just two months, but still that's an extension. And I think there is one more important point, which is that both the United States and China agree to reduce tariffs on non-sensitive goods worth up to $30 billion in both direction. In a sense, 30 billion goods from China worth $30 billion as well as goods from the United States. So they have agreed to reduce tariffs on these goods. So this is not a comprehensive framework to do away with the tariff regime. No, the tariff regime would exist, but within the tariff regime, both sides have agreed to reduce tariffs on certain goods. That's what they have decided. And on artificial intelligence, they have decided to continue the dialogue, start the AI talk, AI dialogue, to identify both the benefits as well as the challenges. And they also agreed to open a bilateral communication channel, which I think is important. This may not produce any immediate outcome, but at the same time, I think this could be the beginning of better communication between the two superpowers when it comes to artificial intelligence. This could turn out to be something bigger, but at the same time, there is no breakthrough even in the field of competition in AI.