BLUF: China Talks
We believe having chips never hurts. Whether that's tortilla chips with salsa or AI chips for your CPU, we'll let you decide. But this week, President Trump took a large serving of the latter.
Let us back up: ahead of his highly-anticipated summit with Chinese President Xi Jinping, we learned that 17 American CEOs would accompany Trump to Beijing, leading some to undoubtedly mistake his diplomatic entourage for an agenda at a high-profile Silicon Valley tech event. Their presence underscored a central reality shaping the summit: our technological advantage remains one of Washington’s strongest sources of leverage.
SpaceX, Apple, Nvidia, and the other companies represented carry significance beyond market caps. Despite the administration loosening some restrictions, Nvidia’s H200 chips remain mired in U.S. export controls, and Apple’s supply chain footprint in China makes the company a mainstay of any discussion on improving economic relations. Other players like Qualcomm and Micron are at the center of communications infrastructure and semiconductor markets.
Looming over it all was the race for AI dominance. As Washington and Beijing compete to shape the next era of economic and military power, the summit presented the first major opportunity for both leaders to engage directly on AI governance and deployment globally. Chinese Premier Li Qiang met with the industry’s leaders, reportedly encouraging deeper commercial engagement – potentially a signal of Beijing’s preference for stability over conflict between the world’s two largest economies.
While no major breakthroughs were announced as of this writing, all signs suggest both sides are trying to manage tensions and improve relations. Trump and Xi have publicly agreed to pursue a “constructive and stable strategic relationship” over the coming years, so expect to see more of this type of engagement. In the near term, Trump has invited Xi to visit the White House on September 24, which would mark his first visit to DC since the Obama Administration, but there is no firm commitment as of yet.
Still, old habits die hard: Xi made a point to reiterate that Taiwan remains the most sensitive issue in the U.S.-China relationship, warning that mismanagement could put “the entire relationship in great jeopardy.”
Regardless of how the dust settles from this trip, Trump seems to have decided that America’s non-diplomats, the diplomats carrying balance sheets, might be our only chance to salvage what remains of this broken relationship.
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