How to Win a Summit: China’s Economic and Commercial Leverage

U.S.-China economic relations at the recent Beijing summit center on navigating a fractured trade landscape characterized by shifting tariff differentials and the rise of managed trade. Dr. Phil Luck, Director of the CSIS Economics Program, highlights that while both nations seek stability, the transition away from market-based principles toward state-subsidized models complicates traditional trade negotiations. Agricultural exports, specifically soybeans, serve as a primary instrument of economic coercion, with China leveraging purchase volumes to exert political pressure. Furthermore, the strategic competition over rare earth supply chains and technology export controls remains in a state of uneasy equilibrium, as both administrations prioritize long-term domestic investment over immediate escalatory measures. Despite the potential for increased economic integration, mutual distrust regarding foreign ownership of critical infrastructure continues to limit significant cross-border investment opportunities.