Last week, Donald Trump went to Beijing. And pay attention, because this was not just another diplomatic trip. It was the first visit by a sitting American president to China in almost a decade. Bands at the airport, children holding flowers, a banquet at the Great Hall of the People, a walk through Zhongnanhai. At the same time, behind the scenes, multi billion dollar agreements were being signed, while other major issues were being carefully avoided.
THE SETTING
So, in order to understand what happened, we first need to understand how it happened. China rolled out its entire diplomatic arsenal. Bands, children with flowers, a private tour of the Temple of Heaven, and a closing walk through Zhongnanhai, the walled compound where Chinese leaders have lived and worked since 1949 and where very few foreigners have ever stepped foot. Xi even gave Trump rose seeds as a farewell gift.
And this is where things become even more interesting. At the banquet, they served beef ribs and tiramisu, an obvious nod to Trump’s tastes. Chinese CEOs were pushing each other just to take selfies with Elon Musk. Lei Jun from Xiaomi managed to get his photo, Musk visibly sighed, and the video went viral on Weibo with more than 20 million views.
Jensen Huang, the CEO of Nvidia ($NVDA), who joined Trump’s delegation at the very last minute, was seen the next day eating noodles in a traditional Beijing hutong, drinking bubble tea, and speaking broken Mandarin with locals. Musk’s son appeared wearing a traditional Chinese vest and carrying a tiger head shaped bag, which sold out online within hours.
THE TRADE DEALS
Nice optics and symbolism, but now let’s move to the serious part. What was actually agreed?
First of all, tariff reductions on agricultural products. In very simple terms, the two sides agreed to mutually reduce tariffs on a range of goods. And to understand how significant this is, consider that agricultural trade between the U.S. and China collapsed by 65.7% in a single year, falling to $8.4 billion in 2025. Analysts expect a 10% reduction in soybean tariffs, something that could reopen the door for Chinese private buyers.
But that’s not all. Beijing granted 5 year registration renewals to 425 American beef plants that had been excluded from the market last year, while also approving 77 new registrations. The U.S. trade representative stated that he expects China to purchase agricultural products worth “double digit billions” over the next three years. And let’s not forget that China also agreed to buy additional Boeing aircraft, along with more American oil.
“And how important is all of this really?” you might ask. It represents the normalization of a relationship that had reached rock bottom. In other words, billion dollar trade flows that had been frozen are now returning.
IRAN AND THE STRAIT OF HORMUZ
And this is exactly where the hottest issue enters the picture. The U.S.-Iran war is entering its third month. Trump himself said that the ceasefire is “on life support.” Meanwhile, the Strait of Hormuz remains closed by Iran, causing gasoline prices in the U.S. and oil prices worldwide to surge.
So what did Xi say? That he wants to help diplomatically, but not militarily. “If I can help, I would like to help,” according to Trump’s comments later shared on Fox News. And China has every reason to care. Roughly 40% of China’s energy imports pass through that strait. The U.S. imports none.
Now you may ask… will China actually pressure Iran? This is where things get complicated. China is Iran’s largest trading partner and buys around 90% of Iranian oil exports. In other words, Beijing provides Tehran with tens of billions of dollars every year. Analysts are very clear about this. China has little incentive to step in directly, and it is also one of the countries best positioned to withstand an oil shock because of its massive renewable energy infrastructure and enormous domestic coal reserves.
TAIWAN
Now, Taiwan was officially on the agenda, but in practice… it was mostly avoided. U.S. Secretary of State Marco Rubio said the issue “did not dominate” the discussions. The White House statement did not even mention Taiwan. On the other side, Xi warned that mishandling the issue could place U.S.-China relations in “great danger.”
What did Trump say? “China and Taiwan need to calm down.” He also added: “I don’t want to travel 9,500 miles to fight.” When asked whether he would approve another major arms sale to Taiwan, he answered: “maybe, maybe not.”
At the same time, Nvidia ($NVDA) appears to be regaining export licenses for its H200 chips to 10 Chinese companies. In other words, something also seems to be moving on the technology front.
