President Donald Trump and Chinese President Xi Jinping met in Beijing on May 13 to seek ways to repair damage from a tariff war that sent U.S.-China trade into a freefall, with both sides aiming to keep the broader economic relationship stable. The talks are expected to produce only modest policy announcements, after a trade truce reached last October, and officials have signaled that Beijing could announce plans to buy American soybeans, beef and Boeing airplanes.
The summit also reflects how far companies have already moved to absorb the volatility of the tariff era. During a tumultuous 2025, the two governments demonstrated how much trade restrictions could disrupt supply chains, and firms responded by shifting production and sourcing—often to other countries—while searching for buyers in new markets. Still, both sides are finding that the relationship cannot simply be replaced, a point made by financier Wilbur Ross, who served as U.S. Commerce secretary in Trump’s first term.
Ross said the premise that the two countries can fully decouple is not realistic. “The idea of somehow China being totally independent of us and us being totally independent of China, I think, is a fiction,” he told The Associated Press. “We are the No. 1 trading player. They are next in line,” he added, saying the key question is how the nations coexist and what “rules of the road” they establish.
For the U.S., farmers and manufacturers have emerged as close to the front of the negotiating pressure. The talks are being watched by American farmers who were shut out of China’s soybean market for most of 2025, after Beijing stopped purchases as part of the broader tit-for-tat dynamic. They are also being watched by U.S. manufacturers that lost access to China’s rare earth minerals—used in products ranging from smartphones to defense systems—during the worst stretches of the tariff conflict.
In China, some business owners say they do not expect trade to return to the rapid-growth pace of the 2000s and 2010s, but they are looking for at least incremental improvements. Michael Lu, founder and CEO of gift box producer Brothersbox in Dongguan, said, “The U.S. used to be a more stable market.” The summit, he said, could bring more positive signs even if “chances of U.S.-China commerce going back to the roaring trade of 15 years ago may be slim.”
The tariff war has altered the shape of trade between the two countries. Before Trump began slapping taxes on Chinese imports in 2018, the average U.S. tariff on China stood at 3.1%, according to Chad Bown of the Peterson Institute for International Economics. Even after coming down from brief triple-digit levels, tariffs remain at almost 48%, Bown said—an increase that has helped push trade away from its pre-2018 pattern.
The decline has also been reflected in U.S. trade shares and where companies do business. In 2016, the United States did more business with China than with any other country, and trade between the two accounted for more than 13% of America’s trade with the rest of the world. By last year, China’s share had been halved to 6.4%, and Mexico and Canada had leapfrogged China as the top two U.S. trading partners, while the U.S. goods and services deficit with China peaked at $377 billion in 2018 and fell to $168 billion last year, the lowest since 2004.
At the same time, Chinese exports have surged to other regions, leaving China with room to keep growing even as the U.S. market shrinks. The report says China’s exports to other markets—particularly Southeast Asia and Europe—helped produce a record global trade surplus of $1.2 trillion last year.
As U.S. and Chinese trade flows shifted, many Chinese companies also developed workarounds that still reach American consumers despite tariffs. The Trump administration has said it wants to crack down on transshipments—goods that are routed through third countries to avoid U.S. tariff impacts. As China sent fewer goods directly to the United States last year, imports from Southeast Asia rose, including increases of 42% from Vietnam, 44% from Thailand and 24% from Indonesia, according to the report.
“I t would be wrong to think that China is no longer relevant for the U.S. market,” said Zongyuan Zoe Liu, a senior fellow for China studies at the Council on Foreign Relations. “Chinese goods are still coming into the U.S.” The claim underscores a central obstacle to any rapid reset: even as companies look for new supply sources, many still depend on components and finished products that are tied to Chinese production.
Other firms have reorganized supply chains more aggressively. Velong Enterprises, which was founded in China’s Guangdong province in 2002 and makes kitchen gadgets and grilling tools for Walmart and other U.S. retailers, diversified after Trump’s first term by adding production capacity in Cambodia and India. “Most serious manufacturers did not simply ‘leave China,’” said Velong CEO and founder Jacob Rothman. “Instead, they built multi-country supply chains around China.”
Some businesses have described the effects of tariffs as not just about higher costs, but about unpredictable changes that complicate contracting and production planning. Appu Jacob Varghese, who owns Zion Foodtrucks outside Colorado Springs, said tariffs changed unpredictably from week to week and briefly shot up to 145%. He said Zion relied on Chinese suppliers for cooking and fire-suppression equipment installed in $50,000 to $60,000 food trucks, while customer contracts called for fixed pricing and delivery about six weeks later.
Varghese said he tried to work through the year as costs bounced, but he also needed to find suppliers outside China. He now gets about half of his cooking equipment from Vietnam and Thailand, and the fire-fighting gear comes from U.S. and Israeli suppliers. While he said he spoke highly of his Chinese suppliers, he also told The Associated Press, “it’s too risky” to rely on them as heavily again.
More broadly, U.S. companies have reduced reliance on Chinese supply in ways that go beyond direct tariff impacts. Apple has moved some iPhone production to India, and Nike has stepped up production in Vietnam, according to the report. “Trade tensions can flare up quite quickly, and that makes the U.S. firms hesitant to rely too heavily on Chinese supply,” said Sarah Tan, a Singapore-based economist at Moody’s Analytics whose work includes China.
InStyler, a hair appliances company outside Los Angeles that previously relied entirely on Chinese suppliers, is shifting some production to South Korea and France and is looking at Italy, Vietnam and Mexico. CEO Dan Fugardi said trade tensions are not behind the product changes, but he said manufacturing in France adds “a little bit of panache,” while reducing reliance on China also “doubles as an insurance plan so that we’re not caught with our pants down.”
The tariff dispute has also spilled into strategic materials and industrial equipment. The United States has blocked shipments of advanced computer chips to China, while China has periodically cut off supplies of rare earth minerals crucial for electronics. The report also says China limited exports of tungsten—used in defense, aerospace and medical device production—and controls about 80% of the world’s tungsten.
Agriculture has been another lever. China stopped buying U.S. soybeans, a blow aimed at Trump’s rural base, and after U.S.-China talks in October, China resumed purchases. Even so, the report says U.S. soybean exports to China dropped 75% in 2025.
The reported pattern of escalating restrictions and retaliation has pushed both sides toward a reset this week, even if only a limited one. As Trump and Xi meet in Beijing, Ross said the nations “have to coexist in some way,” and he framed the central issue as “what will be the rules of the road, and who will benefit the most from those rules.”