Introduction
Chinese President Xi Jinping and US President Donald Trump are preparing for another high-stakes meeting in Washington as the world’s two largest economies try to keep their fragile trade truce alive.
The meeting, scheduled for September 24, 2026, comes after years of tariffs, export restrictions, supply-chain disruptions and negotiations between Washington and Beijing. The relationship has moved between confrontation and temporary cooperation, with both governments attempting to protect strategic industries while avoiding another escalation that could damage their economies.
The question of who is “winning” the trade war has no simple answer. Different economic indicators point in different directions.
China enters the latest summit with exceptionally strong export figures. Chinese exports increased 25% year over year in August, while the country’s trade surplus reached $119.09 billion for the month. The first eight months of 2026 produced a cumulative trade surplus of about $805.51 billion.
At the same time, China faces significant domestic economic challenges, including weak consumption, sluggish investment and continuing pressure in the property sector. The United States, meanwhile, has succeeded in keeping tariffs and technology restrictions at the centre of the relationship, but American consumers and businesses have also faced higher costs and continuing uncertainty.
The latest Trump-Xi meeting is therefore less about declaring a winner and more about determining whether the two countries can manage a competition that has become much broader than tariffs alone.
The Trade War Has Changed Since Its Early Days
When Trump first intensified his trade confrontation with China, tariffs were the central weapon.
Washington argued that China’s trade practices, industrial policies and treatment of American companies created an uneven economic relationship. The Trump administration imposed tariffs on a wide range of Chinese imports, while Beijing responded with tariffs of its own.
The conflict eventually expanded beyond conventional import duties.
Technology restrictions, semiconductor controls, investment rules, rare-earth exports and supply-chain security became increasingly important. Both countries began looking at trade not simply through the lens of prices and imports but also through national security and strategic competition.
That transformation makes it harder to measure the outcome using a single statistic.
A country can reduce imports from another country while still depending on it for critical components. A tariff can protect a domestic producer while increasing costs for manufacturers and consumers. And an export restriction can give one country leverage while also encouraging other nations to develop alternative suppliers.
The current US-China relationship reflects all of these complications.
China’s Export Machine Remains Strong
One of the clearest pieces of evidence from the latest data is China’s continued export strength.
Chinese exports rose 25% year over year in August 2026, accelerating from 23.9% growth in July. Imports increased by 28.2% during the same month.
China’s overall trade surplus reached $119.09 billion in August.
During the first eight months of 2026, China’s cumulative trade surplus reached approximately $805.51 billion, putting the country on track to exceed $1 trillion for the second consecutive year if the trend continues.
These figures demonstrate that US tariffs have not eliminated China’s ability to sell goods internationally.
Chinese manufacturers have continued to compete strongly in sectors including automobiles, semiconductors, electronics and other high-technology products.
This is an important part of the current trade-war picture because Washington’s strategy has aimed partly at reducing China’s economic leverage by limiting access to the American market and restricting selected technologies.
China’s broader export performance suggests that its manufacturers have found other sources of demand.
China Has Expanded Beyond the US Market
One reason China’s exports have remained strong is the country’s ability to sell products across a much wider range of markets.
Chinese companies have expanded their presence in Southeast Asia, Latin America, the Middle East, Europe and other regions.
This diversification matters because it reduces the impact of any single market imposing trade restrictions.
Reuters reported that Chinese exports to the United States also increased sharply in August, rising 34.4% year over year. China’s trade surplus with the United States reached $29.18 billion that month.
That figure is particularly notable because it indicates that even after years of tariffs and trade restrictions, bilateral trade remains substantial.
At the same time, China’s ability to redirect goods toward other markets has become an important feature of the broader economic competition.
The US Has Not Abandoned Tariffs
The fact that Chinese exports remain strong does not mean that American trade policy has failed to produce any effects.
Tariffs remain a major component of Washington’s strategy.
The United States has used tariffs alongside technology restrictions and negotiations to pressure Beijing over trade practices and industrial policy.
In August, Trump was considering an additional 7.5% tariff on Chinese goods related to concerns about China’s excess industrial capacity and the export of inexpensive manufactured products. The proposal came on top of other tariff measures.
The administration has also sought to maintain leverage over strategically important products and supply chains.
However, tariffs have costs.
When an imported product becomes more expensive because of a tariff, the additional cost can be absorbed by exporters, importers or consumers. The final effect depends on market conditions and the ability of businesses to find alternatives.
This means tariffs can influence trade flows without necessarily eliminating demand for foreign products.
American Consumers Are Part of the Equation
One of the most important questions in any tariff dispute is who ultimately pays.
Importers may initially pay the tariff when goods enter the country, but businesses can respond by increasing prices, reducing margins, changing suppliers or moving production.
American consumers can therefore feel the effects when tariffs raise the cost of imported goods or components.
For companies that depend on global supply chains, tariffs can also complicate investment decisions.
Manufacturers may seek to relocate production to countries such as Vietnam, Mexico or India. But moving factories and supplier networks can take years and requires significant investment.
The result is that tariffs can change the structure of trade without producing an immediate replacement for Chinese manufacturing.
China’s Biggest Advantage: Manufacturing Scale
China’s position in global manufacturing is one of the biggest factors behind its resilience.
The country has built extensive industrial ecosystems that connect raw-material suppliers, component manufacturers, assembly plants, logistics companies and exporters.
This concentration allows Chinese companies to produce goods at large scale.
Industries such as electric vehicles, batteries, solar equipment, electronics and industrial machinery have benefited from these networks.
That does not mean every Chinese company is profitable or that every sector is performing equally well.
China’s domestic economy still faces significant challenges.
But the country’s manufacturing base gives Beijing an important source of economic strength during trade negotiations.
The Rare-Earth Factor
Rare earths have become one of the most important strategic issues in the US-China trade relationship.
China occupies a central position in the global supply chain for many rare-earth materials and processed products used in advanced manufacturing.
These materials are important for industries ranging from electronics and electric vehicles to defence and renewable-energy equipment.
The United States has attempted to reduce its dependence on Chinese supply chains, but building alternative sources is a lengthy process.
Recent reporting shows why the issue remains sensitive.
Chinese shipments of rare-earth magnets to the United States fell to 512 tonnes in August, according to Chinese customs data. That represented a 13% decline from a year earlier and a 20% decline from July.
The reduction comes despite efforts to stabilise supplies following earlier tensions.
For Washington, the dependence on Chinese rare-earth processing represents a vulnerability.
For Beijing, the sector provides economic and strategic leverage.
Why Rare Earths Matter to Trump
Trump has placed significant emphasis on reducing America’s dependence on China for critical minerals and other strategic resources.
That makes rare earths an important bargaining issue ahead of the Xi-Trump meeting.
The United States wants reliable supplies without becoming excessively dependent on a single foreign supplier.
China, meanwhile, has an incentive to maintain its influence over a sector where it possesses major processing and manufacturing capabilities.
The result is a complicated negotiating environment.
Washington cannot easily replace China’s role overnight.
Beijing also has to consider the risk that excessive restrictions could accelerate investment in alternative supply chains elsewhere.
Both sides therefore have incentives to negotiate rather than allow the issue to spiral into another major escalation.
China Also Has Weaknesses
China’s strong exports should not be mistaken for an economy without problems.
The latest data show a significant difference between China’s external trade performance and conditions inside the domestic economy.
Chinese policymakers continue to face weak household consumption, soft investment and difficulties in the property sector.
Reuters reported that strong exports are helping support China’s economy while domestic demand remains comparatively weak.
This creates a structural challenge.
Exports can support factories, employment and economic growth, but China cannot rely indefinitely on foreign demand to compensate for weak domestic consumption.
Other countries are also becoming more concerned about China’s large trade surplus.
The United States and European Union have both raised concerns about Chinese industrial overcapacity and the effect of cheap Chinese exports on their domestic industries.
The US Has Its Own Economic Pressures
The United States enters the summit with a different set of challenges.
American consumers continue to care about prices, while businesses need predictable trade rules for investment and production decisions.
Trump is also dealing with broader geopolitical pressures, including the war involving Iran.
Reuters reported that the Iran conflict has increased economic and political pressure on the administration, while rising prices have added to concerns among American households.
This wider environment makes a stable economic relationship with China more valuable.
A new tariff escalation could create additional uncertainty for businesses and consumers.
For Washington, the challenge is therefore to maintain pressure on Beijing without triggering an economic shock.
The Trade Truce Is Central to the Summit
The immediate objective of the September 24 meeting is not necessarily a comprehensive trade agreement.
Instead, both sides are expected to focus heavily on preserving the existing trade truce.
The truce is scheduled to expire in November, making its extension one of the most important economic issues on the summit agenda.
Maintaining the truce would give businesses greater predictability.
It could also prevent the two countries from returning to the rapid escalation that characterised earlier stages of the trade conflict.
For China, an extended truce would provide more time to strengthen its economic position.
For the United States, it would reduce the immediate risk of another disruption while Washington continues to pursue longer-term changes in supply chains and technology policy.
What Washington Wants From Beijing
American officials are expected to push for several concessions.
One major issue is Chinese purchases of American agricultural products.
Another is greater access for American companies and products.
The two sides are also discussing energy trade, including the possibility of reducing or eliminating Chinese tariffs on US liquefied natural gas.
Boeing aircraft purchases are another potential issue.
Reuters has reported that Trump is seeking high-profile economic agreements that could demonstrate progress to American voters and businesses.
Washington also wants China to provide more consistent access to rare earths and strategic minerals.
What Beijing Wants
China’s priorities are somewhat different.
Beijing wants stability in the economic relationship and continued access to major global markets.
Chinese officials also want restrictions on advanced American technologies to be eased or managed.
Artificial intelligence and semiconductor technology have become central areas of competition.
China has argued against measures that could permanently restrict its technological development.
The upcoming summit is therefore expected to address AI and technology alongside traditional trade issues.
Recent US-China discussions have already included proposals for mechanisms to communicate about AI-related risks.
The Semiconductor Battle Continues
The technology dispute may ultimately prove more consequential than tariffs.
Advanced semiconductors are essential for artificial intelligence, data centres, military systems and sophisticated electronics.
The United States has used export controls to restrict China’s access to some advanced technologies.
China, meanwhile, has increased investment in domestic semiconductor production.
This creates a long-term competition that cannot easily be resolved by a single trade agreement.
Even if Trump and Xi agree to extend their tariff truce, the technology rivalry is likely to continue.
Is the US Getting What It Wanted?
One way to evaluate the trade war is to compare Washington’s original objectives with current economic conditions.
The United States wanted to reduce its dependence on Chinese manufacturing, address trade imbalances, protect strategic industries and persuade Beijing to change certain economic practices.
Some supply chains have diversified away from China.
American companies have increased production and sourcing in other countries.
The US has also demonstrated that it can use access to its huge consumer market as a negotiating tool.
However, China’s manufacturing strength remains substantial, and its overall trade surplus has continued to grow.
This means the results are mixed rather than straightforward.
Is China Getting What It Wants?
China has preserved its manufacturing base and expanded exports despite American tariffs.
Its trade surplus remains exceptionally large.
It has also retained significant influence over critical minerals and manufacturing supply chains.
At the same time, China has not escaped the costs of the confrontation.
Its access to advanced American technology has become more restricted, and many multinational companies are pursuing diversification strategies.
The trade conflict has also encouraged other countries to examine whether they are too dependent on China.
China therefore faces pressure even while its export performance remains strong.
The Global Economy Is Also Affected
The US-China trade dispute does not remain confined to Washington and Beijing.
Other countries are affected when supply chains move, tariffs change and manufacturers seek new production bases.
Southeast Asian economies have attracted investment from companies seeking alternatives to Chinese manufacturing.
Mexico has also benefited from companies attempting to locate production closer to the American market.
Europe faces a different challenge.
European governments and companies are increasingly concerned about the competitiveness of Chinese industrial exports, particularly in automobiles, batteries and clean-energy technology.
The result is a global restructuring of trade.
The European Union Is Watching Closely
Europe has become an important part of the broader US-China economic debate.
Recent reporting shows that the EU is running a very large trade deficit with China, with imports significantly exceeding exports.
European policymakers are considering additional measures to protect certain industries.
That means China’s export strength is creating political pressure beyond the United States.
At the same time, European companies rely heavily on Chinese manufacturing and consumers.
Europe therefore faces its own difficult balance between economic cooperation and reducing strategic dependence.
Why There May Be No Clear Winner
The phrase “trade war winner” suggests that one country must clearly defeat the other.
The economic evidence does not support such a simple conclusion.
China has maintained exceptionally strong exports and a huge trade surplus, but its domestic economy faces structural weaknesses.
The United States has used tariffs and technology controls to pressure China and encourage supply-chain diversification, but American businesses and consumers also face costs from trade restrictions.
Both countries have achieved some objectives while falling short of others.
The relationship has therefore evolved into a competition in which both sides possess important advantages.
What the Trump-Xi Meeting Could Change
The September 24 meeting could produce several possible outcomes.
The most immediate would be an extension of the trade truce.
The two leaders could also announce progress on agricultural purchases, energy trade, rare-earth supplies or investment.
Another possibility is that the meeting produces mainly symbolic commitments while leaving the most difficult issues unresolved.
Recent reporting suggests expectations for a major breakthrough are relatively limited, with the emphasis more likely to be on stability and incremental progress.
That would still matter.
A stable trade relationship can be economically valuable even when the underlying strategic rivalry remains.
The Bigger Competition Is No Longer Just About Tariffs
The US-China economic relationship has changed fundamentally.
Tariffs remain important, but the competition now covers:
- Artificial intelligence
- Semiconductors
- Rare earths
- Electric vehicles
- Batteries
- Industrial capacity
- Supply-chain security
- Energy
- Investment
- Advanced manufacturing
This broader competition means that even a successful tariff agreement would not end the rivalry.
Instead, it could create a temporary framework for managing it.
What Businesses Are Watching
Businesses on both sides are looking for predictability.
Manufacturers need to know where they can source components.
Technology companies need clarity about export controls.
Farmers want stable access to Chinese markets.
Energy companies want predictable demand.
Automakers need to understand future tariff structures.
Investors are also watching for signals about whether the world’s two largest economies are moving toward greater stability or another period of escalation.
The summit could therefore influence business decisions well beyond the immediate value of any announced agreement.
The Road Ahead
The biggest question is not simply whether China or the United States has gained more from the trade conflict so far.
The more important question is whether either country can turn its advantages into sustainable economic strength.
China has demonstrated remarkable export capacity, but it needs stronger domestic demand.
The United States has demonstrated significant market power and technological leadership, but it must manage the costs of tariffs and supply-chain restructuring.
Both economies remain deeply connected.
Completely separating them would be expensive and difficult.
That reality is one reason why Trump and Xi continue to negotiate even while strategic competition remains intense.
Conclusion
As Xi Jinping meets Donald Trump in Washington, the latest data make it difficult to identify a simple winner in the US-China trade war.
China enters the meeting with powerful export figures. Its exports rose 25% year over year in August, while its trade surplus reached $119.09 billion for the month and about $805.51 billion during the first eight months of 2026.
Those numbers show that tariffs have not prevented China from remaining a major force in global trade.
At the same time, China’s domestic economy continues to face weak consumption, investment challenges and property-sector problems.
The United States has used tariffs, technology controls and supply-chain policies to put pressure on Beijing. Those policies have encouraged some companies to diversify manufacturing and have increased scrutiny of China’s industrial model.
But tariffs also carry costs for American businesses and consumers, while the United States remains dependent on China for important manufacturing inputs and rare-earth-related supply chains.
The September 24 Trump-Xi summit is therefore likely to focus less on declaring victory and more on managing the next phase of competition.
The immediate objective is expected to be preserving the fragile trade truce before its November expiration, while both sides negotiate agriculture, energy, technology, rare earths and other economic issues.
The evidence suggests that both China and the United States have gained leverage in different areas, while both have also absorbed significant costs.
The outcome of the trade war will ultimately depend not on one summit or one tariff announcement, but on whether either economy can strengthen its position while adapting to a global trading system that is becoming more diversified, more strategic and less predictable.