Trump-Xi summit: no grand bargain, only managed instability

When Donald Trump meets Xi Jinping in Beijing, neither side is likely to get what it wants.

Trump wants Chinese help in ending the war with Iran. Xi wants the United States to ease pressure on China’s core interests, above all Taiwan. Neither outcome is likely. But that does not mean the summit is meaningless. It means the meeting should be judged by a different standard.

This summit matters less as a site of breakthrough than as a window into what US-China relations have become. The bilateral relationship is no longer defined simply by geopolitical friction. Rather, it is increasingly shaped by selective decoupling, partial bifurcation and a wider fragmentation of systems.

In that sense, the real question is no longer whether the US and China will decouple. It is where decoupling has already become irreversible, where it will deepen and where interdependence remains too costly to unwind. The summit is important precisely because it will not restore an earlier relationship. It will instead clarify the boundaries of the one that is now taking shape.

That is why Iran matters. Beijing is unlikely to “deliver” Iran for Washington, not simply because it is unwilling, but because it refuses to be operationalized inside a US-defined strategic order. China does not want to be folded into a framework in which Washington defines the crisis, sets the agenda and then expects Beijing to execute the downstream tasks.

That is what makes China more than a reluctant or unhelpful partner. On Iran, it is acting as a competing system builder. In practical terms, that means Beijing is resisting not just a specific US request, but the larger hierarchy embedded in that request: an order in which the US retains strategic primacy and China is expected to support, enforce or legitimize American crisis management.

From Beijing’s perspective, the US attacks on Iran are not merely another regional episode. They are destabilizing, harmful to regional order and damaging to global energy markets. China has major economic stakes across the Middle East, from energy flows to shipping routes to broader commercial engagement.

It is therefore not a detached observer. It is one of the countries forced to absorb the economic and strategic costs of a conflict it did not choose. The more Beijing sees itself as bearing those costs, the less incentive it has to help Washington translate military pressure into a political settlement.

There is also a deeper pattern here. When Washington has hoped Beijing might help terminate a conflict on American terms, China has been reluctant to assume that burden. During the Nixon opening, the US hoped China might prove useful regarding Vietnam.

But Beijing made clear that wars created by others would have to be settled by the parties themselves. That instinct remains. China may call for a ceasefire, urge negotiations and present itself as a supporter of peace.

But its preferred diplomatic style is facilitative rather than coercive. It is comfortable convening, signaling and encouraging talks. It is far less comfortable acting as Washington’s strategic subcontractor.

To be sure, Beijing does have leverage over Tehran. China is a major buyer of Iranian oil and maintains broad ties with Iran. But leverage is not the same as control, and influence is not command authority. Iran retains its own agency.

More importantly, Beijing sees little reason to spend political capital helping the US in one theater while Washington continues to intensify pressure on China in another. From China’s standpoint, there is no strategic reciprocity in helping the US on Iran while it continues to harden its position on China’s core interests in Asia. That is why the Iran question cannot be separated from Taiwan.

On Taiwan, Xi is just as unlikely to get what he wants from Trump. The US is not in a position to offer the kind of strategic concession Beijing seeks. Taiwan now sits at the intersection of deterrence, alliance credibility and technology-security strategy.

It matters not only because of cross-strait tensions, but because it has become central to how Washington thinks about regional order, semiconductor supply chains and the credibility of American commitments in Asia. Just as Beijing will not deliver Iran, Washington will not deliver Taiwan.

So if neither side is likely to get strategic reciprocity, what is left?

Quite a lot, actually. But it will not be an improvement in any warm or linear sense. Rather, it will be something narrower and more realistic: a relationship made somewhat more governable by lower expectations.

The future of US-China relations is not stable competition. It will be managed instability. That is because the structural conflict between the two sides is too deep to be resolved, yet the costs of letting it spiral are now too high for either side to ignore. The realistic objective is no longer convergence or reconciliation. It is preventing rivalry from becoming unmanageable.

That phrase, managed instability, captures the new normal. Frictions are frequent, tensions are normalized and confrontation is asymmetric. Yet both sides also know that a complete rupture would be deeply damaging.

The US faces war-related energy shocks, inflation pressure and strategic overstretch. China faces weak consumption, economic unease and pressure in its own periphery. Both may be willing to accept deeper rivalry and selective separation.

Neither can afford clean decoupling or uncontrolled escalation. In other words, the rivalry is no longer something either side expects to solve. It is something both sides increasingly understand they must manage.

This is where expectation compression becomes important. One reason the Nixon opening worked as well as it did was that both sides were realistic about their differences. The Shanghai Communique did not pretend that the two countries saw the world the same way. It openly recorded disagreement while still creating a framework for coexistence.

Later phases of the relationship often suffered from inflated expectations, especially the American belief that engagement and globalization would gradually transform China in a more Western direction. That illusion has now largely collapsed.

Washington understands that it has to deal with the Chinese state as it exists, not as it once hoped it might become. Beijing, in turn, understands that even a transactional Trump is not going to trade away Taiwan or abandon America’s strategic position in Asia.

That shift matters because inflated expectations make disappointment destabilizing. Compressed expectations make disappointment manageable. Lower expectations do not produce harmony, but they can produce discipline.

When both sides know in advance what the other will not give, disappointment is less likely to trigger backlash, overreaction or strategic miscalculation. In that sense, the likely failure on the strategic front may still yield a more realistic basis for governing the relationship.

What the summit clarifies politically, firms will have to absorb operationally. The consequences of this expectation reset will be both diplomatic and operational. Companies will have to redesign supply chains. Compliance models will become more layered and more geopolitical.

Capital allocation decisions will increasingly be shaped not only by cost and return but also by sanctions risk, export controls, maritime chokepoints and differentiated political exposure across markets. The real consequence of expectation compression will not be diplomatic warmth – it will be operational adaptation.

There is one more reason this summit may still matter. Even within managed instability, Washington and Beijing can still find limited overlap on strategic public goods. Both have an interest in keeping critical maritime choke points open and global commerce flowing uninterrupted.

That will not be a grand bargain, and it should not be overstated. But it does suggest that even in a more fragmented international system, the world’s two largest powers still share an interest in preventing systemic disruption from spinning out of control.

This summit, then, should not be judged by whether Trump gets China to deliver Iran or whether Xi gets Trump to soften on Taiwan. Neither is likely.

Rather, it should be judged by a narrower but more realistic standard: whether the meeting helps define the boundaries of rivalry, reduces the risk of miscalculation and gives governments and firms a clearer sense of how to operate in a world of managed instability.

That would not be a small outcome. In a relationship this consequential, realism itself is a form of progress.

Bo Kong is a policy scholar and strategic advisor specializing in Chinese political economy, global energy governance, and US–China strategic competition. He is the author of “Modernization through Globalization and China’s International Petroleum Policy.” His commentary has appeared on CNBC, BBC, Phoenix Television, Voice of America, and CGNTV.