The two-day meeting that began Monday between U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng in Stockholm will be key to Washington and Beijing’s efforts to stabilize the truce in their chaotic, tit-for-tat trade war. Even more importantly, it will also be a bellwether for a productive summit between U.S. President Donald Trump and Chinese President Xi Jinping, which is expected to occur before early November.
Although U.S.-China tensions have dominated headlines this year, there is reason to believe that this week’s meeting will lay the foundation for Trump and Xi to establish a much more constructive relationship between the world’s two most powerful nations.
Here’s my prediction for what’s to come: In what they may call a “great rebalancing,” when Trump and Xi finally meet, they will announce advances not only on trade but on other issues, including major investments in energy and manufacturing, a serious Chinese crackdown on exports of fentanyl precursors, a resolution of the TikTok standoff, and promises of Chinese purchases of more U.S. products to reduce the bilateral trade deficit. The two leaders will also talk candidly in private about how they can work together to constrain the provocations of Taiwan’s current government.
If we stretch our minds, it is even possible to imagine that this summit will announce the foundation of a new relationship—maybe even a “partnership”—between the two nations.
This forecast is not based on any leak of secret information. Indeed, if this happens, it may genuinely surprise many members of the Trump administration. Of course, the future is always uncertain, and events can drive this off course. Nonetheless, after studying carefully what both presidents have said, weighing each one’s assessments of his own interests, and analyzing the logic of the situation, my hazy crystal ball suggests the odds are better than even that we will see something like this before the end of November.
In assessing Trump’s likely approach to China, there are four principal considerations that many analysts have missed. First, unlike most of the U.S. foreign-policy establishment, including many members of his own administration, Trump is not a China hawk. In a word association game, if the prompt were China, he would be as likely to respond “friend” as “foe.”
The best evidence for this comes from his presidential campaign. Last year, when around 81 percent of Americans had a negative view of China, Trump was the only candidate campaigning for national office who repeatedly had positive things to say about Beijing. In interviews, social media posts, and speeches, he said, among other things: “I love China”; “I very much respect President Xi”; “The press hates it when I call President Xi ‘brilliant.’ Well, he’s a brilliant guy”; and “I want China to do great.”
Second, Trump believes that a strong U.S. economy is essential for the Republican Party’s success in the midterm elections in November 2026—and that’s required for everything else he cares about. He also believes that a productive relationship with China is a prerequisite for a roaring U.S. economy. This became vivid for him in April, when, in a fit of pique, he announced 145 percent tariffs on China and China responded with 125 percent tariffs, rattling the U.S. economy. When the Trump administration began curbing U.S. exports of advanced semiconductors, and China retaliated by choking its exports of rare-earth magnets—which are essential to producing U.S. automobiles and military weapons—Trump blinked. His administration rescinded its export restrictions, gave Nvidia the greenlight to sell advanced semiconductors to China, and told the Commerce Department to “avoid tough moves” on China, as the Financial Times reported.
Trump and his team have concluded that the U.S. and Chinese economies are so interdependent, and their supply chains so intertwined, that it will be impossible to untangle them during his term. Indeed, for most items, they know even a national campaign to establish independent supply chains would take a decade or longer. So, as most major U.S. and international business leaders have concluded, with the exception of certain military-related products, Trump’s claims about “decoupling” from China or even substantially “de-risking” by disrupting U.S.-China trade are largely rhetorical hot air.
Third, Trump sees himself as the dealmaker-in-chief. As he thinks about his legacy, he aspires to be remembered as a “great peacemaker.” That will not be possible unless he crafts a deal that establishes a productive relationship with China. Given the dark prospects for success in peacemaking in Ukraine and Gaza, Pax Pacifica may be his best chance.
Fourth, Trump’s view of Taiwan is more compatible with China’s than any U.S. president since World War II. As reported in memoirs and other reliable sources, during his first term, when the subject of Taiwan arose in the Oval Office, Trump repeatedly compared the tip of a Sharpie with the size of his desk, saying: That dot is Taiwan; the desk is China. He also said: “Taiwan doesn’t give us anything.” Trump reportedly denied Taiwanese President Lai Ching-te permission to stop in New York on a trip originally planned for August, and Reuters reported that Lai is now delaying his trip until “later this year.”
For Xi, the case for a grand bargain is even simpler. He believes that on both the trade and export control fronts, China has a strong hand. When Trump challenged China by announcing what amounted to an embargo, Xi responded in a way that showed his steel—while simultaneously leaving an acceptable off-ramp.
On Xi’s agenda with the United States, after avoiding a catastrophic war, the issue he cares about most is Taiwan. Indeed, his campaign to make China great again—what Beijing calls “the great rejuvenation of the Chinese nation”—sees “reunification” with Taiwan as essential. Taiwan is not likely to be settled as a real estate deal. But it is not hard to imagine a future in which the United States explicitly states its opposition to Taiwan’s independence and its unwillingness to be provoked into a war with China over the island.
As we await the results of the Stockholm meeting, we should be alert for clues to the road ahead. While Washington’s disruptor-in-chief enjoys surprising his audiences and takes pride in being unpredictable, in this case even his fiercest critics should consider the possibility that he surprises the world on the upside.