Is the West in Chinese hands?
The visit amounted to a few statements lacking real commercial or geopolitical substance, and Trump concluded the summit practically in the same place where he had started it.
We all considered it highly likely that China would become the next world leader after surpassing the US in many areas , especially economically (growth and financial stability) and technologically. After Trump’s trip, we are now certain of it.
Good initial intentions
US President Donald Trump met with Chinese President Xi Jinping for several days last week in Beijing. The trip marked a historic milestone, as it was the first visit by a US president in nearly a decade, since Trump’s own visit in 2017. He was accompanied by a large delegation of business leaders interested in finalizing new trade agreements.
The meeting was expected to focus on trade relations between the two countries and the possible easing of Chinese restrictions on rare earth exports to the US (China effectively holds a near-monopoly in this area), as well as US restrictions on semiconductor exports to China. The Strait of Hormuz was also to be a key topic of discussion, as both countries wish to end the conflict, along with the potential sale of US weapons to Taiwan.
Few practical results
Beyond the political marketing for the US president, which I believe was of dubious effect, the visit amounted to a few declarations lacking real commercial or geopolitical substance . Trump concluded the summit practically where he had begun it , receiving hardly any help from his self-proclaimed «friend» Xi Jinping to deal with a complicated war in Iran and a difficult political climate in his own country. Regarding the former, it was agreed that China would not make any gesture of effective support for Iran (thus facilitating the beginning of the breakdown of the China/Russia/North Korea/Iran/Venezuela bloc). As for the latter, we shall see.
In fact, markets cautiously welcomed the summit, which at first glance seemed constructive and could provide some relief from tensions surrounding trade, semiconductors, and supply chains. However, the lack of clarity regarding the details of the agreements reached during the summit ultimately generated more uncertainty about their economic and geopolitical impact.
Hence, stocks, bonds, and other assets such as gold and silver all fell sharply on Friday: declines led by the technology sector due to the lack of a chip/semiconductor agreement and concerns about rising interest rates with a sharp increase in Treasury bond yields (falling in their prices), which in turn is putting considerable pressure on the earnings prospects of growth stocks.
China controls the tempo and something more
The relationship between the two countries is going to be «better than ever,» Trump told Xi in his opening speech. That may be the case on the surface, but if things don’t change, everything will continue as before , with the added risk of raising the question of whether they could avoid the «Thucydides Trap .» This refers to how, historically, tensions between an emerging power and a dominant power (China and the US, respectively, in this case) have often led to war. It’s not a good point, although it aligns with the attitude of Chinese President Xi, who stated that Taiwan was the most important issue for US-China relations and that, if not handled well, it would push the bilateral relationship into a «dangerous» situation. It’s worth remembering that, for now, only twelve sovereign states (all very small) officially recognize Taiwan as an independent country (in Europe, incidentally, only the Vatican does).
Ultimately, the slowing Chinese economy is receiving valuable support from exports , while the United States continues to depend on China’s stance regarding rare earth minerals.
In summary, the short-term outlook points to continued stabilization , but underlying structural tensions in the trade, technology, and Taiwan sectors remain unresolved and could lead to an increase in geopolitical uncertainty that makes the financial market so nervous.
Any agreement that goes beyond an extension of the so-called Busan truce (the trade and tariff pact agreed in October 2025 at the South Korea summit), easing restrictions on rare earth sales, and increasing Chinese purchases of all types of US goods (not just aircraft and agricultural products as discussed at the meeting), will require more comprehensive negotiations .
We’ll see what happens in upcoming meetings—the presidents are expected to meet up to four times this year—and hopefully, better results will be achieved for the US. The West has a lot at stake.
Postscript on the space race: Google is in talks with SpaceX to reach a rocket launch agreement before its IPO. It seems the company behind the world’s most popular search engine wants to establish orbital data centers in space—a remarkable display of foresight and a favorable outlook for the space sector, which appears poised to become a new benchmark for investors seeking growth companies. It is believed that when SpaceX goes public, institutional money will flood the sector, to the point that strategies are being offered to acquire positions in SpaceX before the initial public offering.