The trade war has been a cornerstone of Trump's second presidential tenure but failed to bring down deficits. Meanwhile, China clocked a mammoth trade surplus despite barriers.

Chinese President Xi Jinping is scheduled to hold talks with United States President Donald Trump at the White House during his state visit – the first by a Chinese leader in more than a decade – as the world’s two largest economies are locked in an ongoing tussle over trade and artificial intelligence.

Trump is expected to welcome Xi on the tarmac at Joint Base Andrews outside the US capital, Washington, DC, in a rare gesture for a high-stakes three-day visit by the Chinese leader.

He ramped up tariffs on Chinese goods after returning to power in 2025, and has since imposed curbs on the sale of AI chips to Beijing as the two nations compete for supremacy in the AI race.

The future of their fragile trade truce will be high on the agenda when the two leaders meet on Thursday. US trade with China fell sharply in 2025, with trade declining nearly 30 percent compared with the year before.

But China’s trade with other countries has seen a sharp rise, with Beijing registering a $1.2 trillion global trade surplus last year.

So, what will be on the agenda of the talks, and who is really winning the US-China trade war?

A Congressional Research Service report noted that as of July 2026, Chinese goods in the US faced a tariff rate of 36.5 percent, while US goods entering China were taxed at 31 percent. These tariff rates are averages, not product-specific.

The rate varies sharply by product. For example, Chinese copper and its products faced an effective rate of 73.6 percent in June 2026, while aluminium and its products faced 65.2 percent, iron and steel items about 50 to 58 percent and vehicles and auto parts 44.4 percent. These figures show the variety of tariff layers applicable to specific products.

China, meanwhile, maintains a 10 percent additional tariff on US imports on top of its normal tariffs and product-specific duties. For example, US crude oil faces 20 percent, LNG 25 percent, soya beans 13 percent, and US beef can face up to 77 percent.

Soon after resuming office in January 2025, Trump imposed a 10 percent duty on Chinese goods over fentanyl and immigration concerns, leading to the ongoing trade war. Beijing responded with levies on US coal, LNG, crude oil, and autos, as well as additional curbs on exports of five metals key to defence and clean energy.

By April 2025, the trade war escalated, with Chinese goods attracting 145 percent tariffs while Beijing imposed a 125 percent levy on US imports, in addition to curbs on rare-earth exports.

The rivals struck a tariff truce after talks in South Korea, which is due to expire on November 10.

However, the truce has not prevented Washington and Beijing from engaging in trade curbs. Last month, the US banned imports of humanoid robots produced in China, sanctioned Chinese shipping operators over alleged handling of Iranian fuel, and imposed restrictions on other sectors, including a threat to sanction Chinese AI firms.

Beijing said it was left with “no choice but to take necessary countermeasures”, unveiling a package that sanctioned US firms and curbed exports of drones and their tech to the US.

No, the tariffs are only one aspect of a broader economic and technology rivalry between the US and China.

The trade conflict also includes sanctions, entity lists, investment restrictions, and research restrictions, alongside turning supply chains into instruments of economic pressure.

China’s leverage is concentrated in critical minerals, and it has restricted exports of rare earths – crucial for semiconductor manufacturing and AI. Beijing controls almost 90 percent of global processing and refining capacity, and that dominance makes these restrictions particularly consequential for electronics, electric vehicles and defence equipment.

Meanwhile, Washington’s main leverage is advanced technology. The US restricts China’s access to advanced semiconductors and chipmaking equipment, although the policy has become more selective in recent months.

Earlier this month, the US started a trial against Huawei, accusing the Chinese tech giant of stealing technology.

According to the latest US Census Bureau data, US-China bilateral trade has fallen by 29 percent – from $584bn in 2024 to $415bn in 2025.

The contraction has continued into this year: trade between the two countries reached $222bn in January-July, down 14.5 percent from the same period in 2025 and 31 percent from January-July 2024.

The decline is driven mainly by lower US imports from China. US imports fell from $194bn in January-July 2025 to $156bn in the same period in 2026, which is 34.6 percent less than the corresponding period in 2024.

China’s imports of US products remained virtually unchanged year-on-year at $65bn in the first seven months this year, but fell about 20 percent compared with 2024.

The US goods trade deficit with China fell from $297bn in 2024 to $203bn in 2025. Between January and July 2026, it stood at $91bn, but the significant decline in the deficit is driven by the US importing fewer Chinese goods rather than selling them more.

While US-China bilateral trade took a hit, Chinese exports have increasingly been redirected towards other markets as Beijing took advantage of Trump’s tariff war against countries around the world.

China’s total goods exports rose 6.1 percent in 2025, reaching about $3.77 trillion, according to its National Bureau of Statistics.

Chinese exports to ASEAN countries rose 14 percent in 2025, to about $660bn, making it Beijing’s largest export market. Exports to the European Union countries rose 9 percent, to about $560bn.

In the first half of this year, Chinese exports rose 13.4 percent, their 11th consecutive quarter of growth, according to government statistics. For instance, China-ASEAN trade reached $744bn in the first seven months, up 24.7 percent from a year earlier.

China is selling more to Asian, European, African and Latin American countries as it moves up the value chain behind electric vehicles, batteries, electronics, machinery and other high-tech goods.

Until August this year, China had a goods trade surplus of about $820bn – already approaching the mammoth 2025 full-year surplus of roughly $1.2 trillion.

Well, no. Though the central argument behind Trump’s tariff regime was anchored in reducing Washington’s trade deficit, the goods-and-services trade deficit has remained stagnant.

The US government data show that the goods deficit was $1.201 trillion in 2024, before Trump’s presidency. In fact, it rose to $1.235 trillion in 2025, an increase of 2.8 percent in Trump’s first year of the second term.

Since the bulk of tariffs came into force in April 2025, the US goods trade deficit widened further in the corresponding months of 2026.

Between May and July 2025, the US recorded a combined goods trade deficit of about $277bn, according to Census Bureau data. In the same period in 2026, the deficit reached $325bn, an increase of 17.4 percent.

The deepening trade deficit was larger in each month: $105bn (2026) versus $92bn (2025) in May, $101bn versus $84bn in June, and $119bn versus $101bn in July.

Source: https://www.aljazeera.com/features/2026/9/23/as-xi-meets-trump-whos-winning-their-trade-war?traffic_source=rss