Hsien-Ming Lien, President of the Chung-Hua Institution for Economic Research (CIER), stated that the second Trump-Xi summit concluded with the United States and China exchanging views on trade, tariffs, rare earths, AI, and other issues, resulting in some interim progress. However, deep divisions persist over core issues, and mutual trust remains limited. In the short term, the two countries are more likely to maintain stability through ongoing negotiations and careful management of their differences rather than resolving all issues at once.
Limited U.S.-China Trust Leaves More Room for Interim Agreements on Trade and Rare Earths
Lien noted that the summit covered bilateral trade and tariffs, Chinese purchases and investment in the United States, AI, critical minerals, Iran, and Taiwan. Economic and trade issues, such as commerce and rare earths, offer greater room for negotiation. The two sides agreed to extend their trade truce and made progress on tariffs for certain non-sensitive goods and on supply chain issues. However, these arrangements remain provisional. Whether both sides fulfill their commitments will be critical to determining whether U.S.-China economic and trade relations can achieve greater stability.
Meaningful AI Cooperation Remains Elusive as Taiwan’s Semiconductor Industry Stays Central to U.S.-China Competition
In contrast, the AI rivalry remains a structural issue that is difficult to resolve in U.S.-China relations. Lien explained that the United States regards leadership in AI as a critical arena for technological and national competition, while China continues to pursue self-reliance. The two countries remain in competition over advanced AI chips, computing capacity, and technical standards. Although they agreed at the summit to establish mechanisms for AI dialogue and risk communication, this should be seen as an effort to reduce miscalculation and manage risks, rather than a fundamental shift in the U.S.-China AI rivalry.
Lien added that Taiwan’s semiconductor manufacturing capabilities are a critical factor in U.S.-China competition over AI. The global AI industry depends heavily on advanced semiconductor supply chains, in which Taiwan holds an important position through its chip manufacturing capabilities and related industrial ecosystem. Taiwan is therefore not merely a cross-Strait issue. It is also integral to the U.S.-China technology competition and supply chain security. The White House fact sheet on the Trump-Xi summit omitted Taiwan, indicating that the two sides continued to avoid reaching an explicit public consensus on the issue. This omission does not mean that Taiwan has become less important.
Taiwan Omitted from Post-Summit Fact Sheet as Core U.S.-China Divisions Await Further Developments
Lien observed that the summit suggests U.S.-China relations will likely continue to move toward managed competition. The two sides may still reach interim agreements through negotiations on issues where interests can be exchanged, such as tariffs, agricultural purchases, and rare earths. However, breakthroughs on AI, technology controls, Taiwan, and other issues involving national security and strategic interests are unlikely to be achieved at a single summit.
Therefore, the true measure of the Trump-Xi summit lies not only in the number of agreements announced but also in whether both sides fulfill their commitments and establish stable communication and crisis management mechanisms. As U.S.-China relations enter a new phase characterized by both competition and negotiation, Taiwan should closely monitor strategic shifts resulting from developments in semiconductors, AI, and supply chain restructuring. Additionally, Taiwan should reduce its dependence on any single market or supply chain and proactively prepare for the spillover effects of changes in U.S. and Chinese policies.
Author: CIER Editorial Team
Date: September 29, 2026