Will China's New Confidence Backfire at the Trump-Xi Summit?

Is China about to make a costly mistake? As Donald Trump prepares for his summit with Xi Jinping later this month, Beijing's newfound confidence from last year's trade truce may be setting the stage for dangerous miscalculations.

The Dangerous Lessons of Busan

Last October in Busan, Trump and Xi struck a fragile deal to freeze their escalating economic war for one year. The U.S. backed down from sky-high tariff threats, while China resumed purchasing American agricultural products and lifted sweeping restrictions on critical mineral exports.

But here's what's concerning: Chinese elites interpreted this outcome as proof of their country's arrival as America's equal. Prominent scholar Jin Canrong declared that Busan demonstrated China and the U.S. had become "equal great powers." Political scientist Zheng Yongnian argued that Trump's use of "G-2" language "implicitly acknowledged China's pivotal global status."

Even some American experts fed this narrative. Former Biden administration official Rush Doshi called Busan an "unmistakable demonstration that China could now face America as a true peer."

The Reality Check

This confidence may be premature—and dangerous. While China is undoubtedly a great power, the gap with America remains substantial across multiple dimensions.

Start with alliances. The U.S. commands a network of over 60 allies and security partners, including virtually every advanced economy. China's security partners? Primarily rogue states. Russia is bogged down in Ukraine, Iran is weakened by sanctions and domestic turmoil, and unpredictable North Korea creates more diplomatic headaches than strategic solutions for Beijing.

Militarily, China can only match the U.S. in scenarios near its own borders. Those war game reports showing Chinese victories? They're always set near Taiwan—on China's doorstep—never in Puerto Rico, Greenland, or the Middle East. Despite impressive military modernization, China lacks the global power projection capabilities to challenge American supremacy beyond its immediate neighborhood.

The Economic Leverage Gap

Economically, the balance still tilts toward America. Yes, China has monopolies on rare earths and pharmaceutical ingredients—but these vulnerabilities are now widely recognized, spurring diversification efforts globally.

China faces deeper structural dependencies. It relies heavily on industrial inputs from the U.S. and its allies, imports most of its petroleum via vulnerable sea routes, and depends increasingly on export markets as domestic demand remains weak. China's trade surplus hit nearly $1 trillion in 2024 and surpassed that figure in 2025—an unsustainable level that foreign markets may not continue absorbing.

Then there's the nuclear option: dollar dominance. If Washington imposed sweeping financial sanctions on China's major state banks, these institutions would struggle to function internationally. Despite Beijing's efforts to internationalize the renminbi, the dollar will remain the world's reserve currency long after China's chokehold on rare earths is broken.

The Overconfidence Trap

Why does this matter for the upcoming summit? Overconfident powers often overplay their hands. If Beijing truly believes it achieved parity with Washington through the Busan negotiations, it may push more aggressively on territorial disputes, economic coercion, or military posturing in Asia.

This wouldn't just affect U.S.-China relations. Asian allies like South Korea and Japan could face renewed pressure campaigns. Global supply chains might face fresh disruptions. Financial markets, which welcomed the Busan truce, could experience new volatility.

The Stakes for Global Stability

The upcoming Trump-Xi meetings will test whether China's leadership can distinguish between tactical success and strategic parity. Beijing did successfully push back against American economic threats in 2025—but this doesn't make China America's equal any more than a successful counterattack makes a smaller army equivalent to a larger one.

The danger isn't that China is weak, but that it might act as if it's stronger than it actually is. History shows that rising powers often miscalculate their capabilities, leading to conflicts that serve no one's interests.