Trade tensions between the United States and China are poised to take center stage next week as President Donald Trump prepares to host Chinese President Xi Jinping at the White House on September 24. The summit aims to address ongoing disputes, particularly over tariffs, that have defined the relationship between the world’s two largest economies since 2018.

While a tentative truce was established in October of last year that halted the rapid escalation of tariffs, a comprehensive and lasting trade agreement has yet to be finalized. Tariffs remain a key point of contention, with both nations maintaining complex, sector-specific duties on each other’s goods.

In April 2025, U.S. tariffs on Chinese goods peaked at an effective rate of 145%, while China’s levies on U.S. products reached 125%. Although both countries have subsequently reduced their rates, as of July, the average tariff rate on imports from China into the U.S. was still 22.8%, the highest among major U.S. trading partners, according to the Penn Wharton Budget Model. Some product categories face particularly high tariffs, including steel and aluminum at 40.5%. On the Chinese side, a baseline tariff of 10% continues to apply to all U.S. goods, with additional rates on select items such as 15% on liquefied natural gas.

Trade flows between the two countries have persisted despite these barriers. Chinese customs data indicate that total bilateral trade—imports and exports combined—reached $400.8 billion in the first eight months of 2026, up 5.4% from the same period in 2025. However, the trade balance remains heavily skewed in China’s favor, with exports accounting for roughly 75% of this total. This persistent surplus has long been a source of concern for Washington, which also faces similar trade frictions with the European Union.

President Trump has signaled that discussions at the summit will cover a broad range of issues, but tariffs remain the principal focus. Dan Wang, director of the Eurasia Group’s China team, noted that “Xi wouldn’t go if there were no deliverables on tariffs or a trade truce.” Currently, both governments are negotiating a tariff reduction framework involving $30 billion worth of goods from each side. This initiative stems from agreements reached during Xi’s visit to Beijing in May, which also included the establishment of trade and investment councils designed to manage ongoing disputes.

China has exerted pressure on the U.S. by restricting exports of rare earth minerals—critical for high-tech industries—following America’s aggressive tariff policies. Experts argue that China maintains leverage going into the talks, citing its flexible supply chains and resilient export growth despite tariff barriers. Xi’s diplomatic stature has been reinforced by recent engagements with key global leaders, including Russian President Vladimir Putin and Indian Prime Minister Narendra Modi.

Adding to the complexity, mounting geopolitical tensions—particularly involving Iran—are influencing the dialogue. Reports have emerged alleging that Chinese entities provided Iran with satellite imagery of a U.S. military base in Jordan, underscoring the broader strategic competition. Meanwhile, the Trump administration seeks to secure Chinese commitments to increase purchases of U.S. agricultural products, especially soybeans, as it prepares for pivotal midterm elections in November.

In parallel with trade negotiations, intense rivalry persists in the technology sector, particularly in artificial intelligence, further complicating the U.S.-China relationship as the summit approaches.