Donald Trump and Xi Jinping are set to meet Thursday in what both sides are framing as a stability summit, even as the two countries remain locked in a deepening dispute over trade, rare earth minerals, and artificial intelligence.
The meeting comes at a moment of genuine tension across multiple fronts. The trade conflict between the United States and China has been escalating, and access to rare earth minerals, which China controls in large volumes and which are essential for electronics, defense hardware, and electric vehicles, has become a separate pressure point. AI competition adds a third layer, with both governments treating technological leadership as a strategic priority.
Despite that backdrop, both leaders are expected to project calm in public. That kind of optics management is common at summits between rival powers: neither side typically wants markets or allies to read the meeting as a breakdown. What gets said privately, and what commitments if any follow, will matter more than the tone of the handshake.
Iran and the Strait of Hormuz Enter the Frame
Trump is also expected to press Xi on Iran. Specifically, Trump is signaling he wants China to use its leverage over Tehran to reopen the Strait of Hormuz and bring the war there to an end. The Strait of Hormuz is the narrow waterway between Iran and Oman through which roughly a fifth of the world's oil supply moves. Any sustained closure drives energy prices higher globally.
China is one of Iran's most significant trading partners and buys a large share of Iranian oil, which gives Beijing real, if imperfect, influence over Tehran's decisions. Whether Xi is willing to use that influence on Washington's behalf depends on what Trump is offering in return, and that trade-off sits at the center of what makes this meeting consequential.
Linking the Iran ask to the trade dispute is potentially significant. If Trump signals tariff relief or other concessions in exchange for Chinese pressure on Tehran, that would represent a direct connection between two seemingly separate crises. If Xi declines to engage on Iran, it narrows the summit's practical output considerably.
What to Watch After the Meeting
The rare earth question deserves attention on its own. China produces the overwhelming majority of the world's rare earth elements and has previously used export restrictions as a policy tool during disputes with other countries. Any signal from this summit about rare earth access, whether loosening or tightening, would have direct consequences for U.S. manufacturers and defense contractors who depend on those materials.
On trade, markets will be watching for any indication of a pause, rollback, or escalation in the tariff measures that have been accumulating between the two economies. Even a vague commitment to continued talks tends to ease near-term pressure on equities and supply chains that span both countries.
The AI dimension is harder to resolve in a single meeting. Both governments see dominance in artificial intelligence as tied to long-term economic and military power. Export controls, chip restrictions, and investment screening have all become tools in that competition. A summit communique that addresses AI cooperation, even at the margins, would be a notable shift.
For now, the public emphasis on stability is itself a signal that neither side wants an open rupture. The real measure of Thursday's meeting will be what concrete moves, if any, follow in the days and weeks after the cameras leave.
Qatar's foreign ministry said mediators including Qatar, Pakistan, and Oman have reached "very progressive stages" in efforts to end the US-Iran war, pushing Brent crude down more than four percent.
Qatar confirmed it is mediating between the US and Iran but said no direct talks are currently planned. The clarification follows conflicting statements from President Trump, who claimed talks are under way, and Tehran, which denied any dialogue is happening.
Saudi Aramco reported sharply higher second-quarter 2026 profits as the Iran war restricts global oil supply and pushes crude prices up. Other oil supermajors also posted outsized earnings, raising concerns about sustained fuel cost pressure for importing economies.
President Trump called current Iran negotiations the "last chance" to end five months of conflict, pushing oil prices higher. Tehran denied formal talks are taking place, raising the risk of a diplomatic breakdown with direct consequences for global energy markets.
