BEIJING – The upcoming summit between U.S. President Donald Trump and Chinese President Xi Jinping, scheduled for May 14 and 15, is poised to be significantly shaped by the escalating conflict in Iran, pushing critical economic issues like tariffs and rare earth supplies to the periphery. The high-stakes meeting in Beijing comes at a time of profound global instability, with the Middle East engulfed in a conflict that has reverberated across international markets and diplomatic corridors.
A Summit Under the Shadow of War
The primary focus on the Iran war was confirmed by U.S. Treasury Secretary Scott Bessent, who explicitly stated that the conflict would be a central topic of discussion. This prioritization underscores the severity of the crisis, which erupted in late February of the present year, rapidly escalating into a full-scale war. The humanitarian toll has been immense, with reports of widespread displacement and civilian casualties, while the economic fallout has sent shockwaves through global energy markets.
In a significant diplomatic move earlier this week, China hosted Iran’s foreign minister for the first time since the war began. This engagement, seen as a pivotal step towards de-escalation, has ignited cautious optimism for a potential peace deal. Such prospects have already yielded tangible results, with global oil prices experiencing a notable decline and stock markets worldwide registering gains, reflecting a collective sigh of relief from investors hoping for an end to the conflict’s disruptive influence. The Strait of Hormuz, a critical chokepoint for global oil shipments, has been particularly volatile, experiencing repeated instances of exchanged fire between U.S. and Iranian forces, each accusing the other of initiating aggression. Just days prior to the summit, a Chinese-owned oil tanker reportedly sustained damage in the strait, as reported by Chinese media outlet Caixin, further highlighting the immediate economic and security risks posed by the ongoing hostilities.
Business Diplomacy on a Reduced Scale
While geopolitical crises take center stage, the customary robust business component of U.S. presidential visits to China appears to be curtailed. The U.S. government, according to an executive with direct knowledge of the arrangements, declined China’s invitation to organize industry-specific meetings between senior Chinese leaders and American CEOs. The rationale behind this decision was reportedly to avoid giving the impression that American businesses were aligning too closely with Beijing at a sensitive geopolitical juncture.
As of Tuesday, the White House had yet to formally extend invitations to executives for the trip. A proposed list of two dozen business leaders, initially considered for the delegation, could be halved, indicating a significantly smaller corporate presence compared to previous high-level engagements. Despite this reduction, prominent figures, including the CEOs of aerospace giant Boeing and financial services behemoth Citigroup, are still expected to accompany President Trump, according to two separate sources. Boeing, in particular, is anticipated to finalize its first substantial order from China in nearly a decade around the time of the summit, a deal that could symbolize a measure of economic cooperation amidst broader tensions.
This scaled-back business delegation contrasts sharply with previous presidential trips. When President Trump visited Saudi Arabia in May 2025, over 30 U.S. executives were part of his entourage. Similarly, during his first term in November 2017, when he made the last state visit by a sitting U.S. president to China, nearly 30 CEOs accompanied him, resulting in the signing of 37 major deals valued at over $250 billion. The reduced corporate presence this time around suggests a shift in diplomatic priorities, focusing less on immediate commercial agreements and more on strategic and security concerns.
However, even a smaller contingent of executives and the symbolic images of President Trump and President Xi together could send a crucial signal within China. Michael Hart, president of the Beijing-based American Chamber of Commerce of China, noted that "since U.S. military actions earlier this year, Chinese officials have been more hesitant to engage with the American business community." A visible engagement at the highest level, even without a massive business delegation, could ease this hesitancy, making it more acceptable for Chinese officials to re-engage with U.S. businesses. China’s foreign ministry has reiterated its welcome for U.S. business expansion and expressed hope that these companies would continue to advance bilateral economic relations, underscoring the enduring importance of trade ties despite the current climate.
The Broader Geopolitical Context: Trade, Tech, and AI
Beyond the immediate crisis in Iran, the U.S.-China relationship continues to navigate a complex landscape of trade disputes, technological rivalry, and emerging security threats. The initial impetus for many of the tensions, particularly the trade war, appears to have somewhat receded in urgency. Both nations are reportedly stepping back from recent confrontations over U.S. sanctions and technology restrictions. This de-escalation could be attributed to a mutual recognition of the economic damage inflicted by prolonged trade hostilities and the need to find common ground on more pressing global challenges.
However, underlying structural issues persist. Beijing’s priorities for the summit are expected to include discussions on tariffs, the contentious status of Taiwan, and U.S. restrictions on Chinese access to advanced technology. China was the first major economy to retaliate against tariffs announced by the Trump administration in April 2025, marking a significant escalation in the trade war that has impacted various sectors, from agriculture to manufacturing, in both countries. These tariffs, imposed on billions of dollars worth of goods, were aimed at addressing what the U.S. perceived as unfair trade practices, intellectual property theft, and forced technology transfers. While some progress may be made on specific deals, a comprehensive resolution to these deep-seated trade grievances is unlikely to be the primary outcome of this particular summit.
One area where cooperation is actively being pursued is the growing security threat posed by artificial intelligence (AI). Both the U.S. and China, leading global powers in AI development, recognize the profound implications of this technology for national security and global stability. Reports indicate that the two nations are exploring mechanisms, or "guardrails," to prevent AI rivalry from spiraling into a crisis. This nascent cooperation on AI reflects a shared understanding of the existential risks and the potential for unintended consequences if the development and deployment of advanced AI systems are left unchecked.
Strategic Commodities and Economic Implications
Changes to China’s increasingly tight rare earth export controls also loom large on the global economic agenda. Rare earth elements are a group of 17 chemically similar metallic elements critical for a wide range of high-tech applications, from consumer electronics and electric vehicles to defense systems and renewable energy technologies. China currently dominates the global supply chain for these strategic minerals, controlling a significant portion of their mining, processing, and refining. Any adjustments to Beijing’s export policies would have far-reaching consequences, affecting industries worldwide, not just in the United States. The summit may provide an opportunity for the U.S. to press for greater transparency and stability in rare earth supplies, though significant concessions are improbable given China’s strategic leverage.
Despite the overriding focus on Iran, some tangible economic progress is still anticipated. Scott Kennedy, a senior advisor and trustee chair in Chinese business and economics at the U.S.-based Center for Strategic and International Studies, expects President Trump to secure deals related to Chinese purchases of U.S. soybeans and Boeing airplanes. These sector-specific agreements would offer a symbolic win and a boost to American industries. Kennedy also anticipates discussions on U.S. plans to establish "boards" – specialized trade and investment organizations designed to handle specific bilateral issues, potentially streamlining future engagements and dispute resolution mechanisms.
Implications and Future Outlook
The summit’s likely outcome, according to Kennedy, is that "The meeting most likely will solidify the advantages China has gained over the past year." This assessment suggests that while the immediate crisis in Iran may bring the two superpowers together on a diplomatic front, the broader geopolitical and economic landscape has seen China consolidate its position.
For global business, an end to the Iran war would be a "great relief," as stated by Hai Zhao, a director of international political studies at the Chinese Academy of Social Sciences, a state-affiliated think tank. He added that such an achievement "would be remembered as very much the success" for the Trump-Xi summit, highlighting the profound impact of resolving the conflict on global stability and economic sentiment. The ability of the two leaders to navigate this complex geopolitical challenge will define the summit’s legacy, potentially setting a precedent for future cooperation or continued divergence.
Ultimately, the Beijing summit represents a critical juncture in U.S.-China relations, where the immediate exigencies of a major global conflict have momentarily eclipsed the persistent trade and technological rivalries. While a comprehensive resolution to all bilateral issues is not expected, the engagement offers a vital platform for dialogue and potential de-escalation on the most pressing security challenge facing the international community.
CNBC’s Matthew Chin contributed to this report.
