U.S. alliance strains complicate China strategy

President Donald Trump has spent years trying to squeeze China — imposing tariffs, cutting off access to advanced technology and pressing U.S. allies to reduce their dependence on Beijing. When he begins meetings with Chinese President Xi Jinping on Wednesday, he’ll juxtapose the long-standing bluster with the pomp and circumstance the leaders lavish on each other.

And the two-day tête-à-tête will take place as Trump confronts a China that has proved harder to isolate and allies increasingly reluctant to line up behind the U.S. to do it.

Part of that is Beijing’s doing. China has deepened trade ties around the world while building leverage of its own, most notably through rare earths. Its global trade surplus is on pace to top $1 trillion for a second straight year, reaching a record $1.2 trillion for 2025 even as its exports to the U.S. dropped.

But the shift also reflects Trump’s approach. Since returning to office, fights over tariffs, defense spending and personal spats have strained relationships with traditional allies even as Trump has pursued a more transactional relationship with Xi.

Countries Washington has traditionally counted on to magnify its power are increasingly seeking room to maneuver between the world’s two largest economies.

As a result, Trump enters Thursday’s summit facing a test of whether strains with U.S. allies have made it harder to marshal American power against Xi.

“China is presenting itself to the world as the stable counterweight to an erratic and violent United States,” said Ryan Hass, director of the John L. Thornton China Center at the Brookings Institution think tank. “America retains unmatched power on the world stage, but leverage requires a united front and there are a shrinking number of countries willing to follow America’s lead right now.”

For decades, one of the U.S.’s biggest advantages over China has been its network of allies and partners. When the U.S. restricted technology or imposed sanctions, bringing major economies in Europe and Asia along made those measures harder for Beijing to evade.

China still lacks anything comparable: The Lowy Institute, an independent Australian foreign-policy think tank, scored the U.S. defense networks at 81.4 on a scale of 100, versus 18.9 for China in 2025. But Beijing does not need U.S. allies to switch sides to erode that advantage. It only needs them to become less willing to move with Washington, Hass and other China experts said.

“When democratic countries don’t have public support for a counterpart, it raises the cost for leaders to align with the United States,” Hass told CNBC. “It lowers the cost for leaders to defy the United States.”

Trump has taken a sledgehammer to relationships with allies. He’s clashed with NATO over defense spending, threatened to reduce the U.S. troop presence in much of Europe while announcing plans Tuesday to add troops in Greenland after threatening to take over the island and imposed tariffs on the U.S.’s northern neighbor Canada.

“Although our biggest economic complaints regarding China’s economy are shared by many of our allies and partners, the current U.S. approach is to attack all of those countries … instead of forming a common front,” said Melanie Hart, senior director of the Atlantic Council’s Global China Hub.

Meanwhile, public confidence in the U.S. as a reliable partner has fallen. In Canada, the share of people who described the U.S. as a reliable partner fell from 83% in 2022 to 35% this year, according to Pew Research Center in June. In Germany, the share who said Washington considers other countries’ interests when making foreign policy fell from 60% in 2023 to 23%.

Canada this month was invited to be the first “associate member” of the European Union as Prime Minister Mark Carney’s government seeks deeper defense ties with Europe and less reliance on the U.S.

Foreign allies “worry that as soon as they make a deal with us, Washington will undercut them in some way that they will then regret,” Hart told CNBC.

China has sought to capitalize on that opening, not necessarily by persuading countries to choose Beijing over Washington, but by making the choice less binary.

India offers one example.

The country remains a U.S. security partner and a strategic competitor of China, with troops from both countries still deployed along their disputed Himalayan border. Yet Xi visited India this month for the first time in seven years as the two countries took what Tanvi Madan, a senior fellow at Brookings, called “baby steps” toward stabilizing relations.

Bilateral trade reached a record $155.6 billion in 2025, according to Chinese data, and Xi and Indian Prime Minister Narendra Modi agreed to strengthen business and transport links despite unresolved security disputes.

“Uncertainty over Trump’s approach to Beijing and strains in India’s own relationship with the U.S. have given India another reason to keep relations with China on steadier ground,” Madan told CNBC. “Even a tactical détente between the U.S., India and China can have downstream impacts on India’s strategic environment.”

The changing balance of leverage is most tangible in the economic relationship.

Trump’s tariffs targeted China’s reliance on U.S. buyers, while U.S. export controls targeted a deeper dependency: the advanced chips and manufacturing equipment Beijing needs to compete at the technological frontier.

Those pressure points remain. But Beijing has developed leverage of its own. China placed seven rare-earth elements under export controls last year, forcing companies to seek government approval to ship them abroad. China accounted for more than 70% of global rare-earth mining and more than 87% of refining and production in 2024, according to the U.S. Geological Survey.

In short order, Ford halted Explorer production in Chicago for a week amid magnet shortages, while Japanese and European auto suppliers shut production lines awaiting materials. 

Suddenly, the U.S. faced a version of the vulnerability it had spent years trying to create for Beijing: dependence on something the other side could withhold.

“One of China’s primary objectives ahead of these meetings is to box the U.S. in diplomatically, to limit the Trump administration’s range of action,” Hart said, pointing to critical minerals as one tool Beijing has used.

That vulnerability now hangs over Thursday’s summit. The current trade truce expires Nov. 10. Rare earths were again on the table in weekend talks between Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng.

Bessent said Wednesday after another meeting with He that the U.S. was “fine with either continuing” the current truce or “examining [a] bigger deal.”

Meanwhile, Trump has other cards to play.

U.S. and allied firms control critical parts of the advanced semiconductor ecosystem, and American restrictions limit China’s access to its most sophisticated chips and manufacturing equipment. Trump has also allowed limited sales of Nvidia’s H200 AI chips to China even as broader restrictions remain in place, making semiconductor access another bargaining point.

That bargaining dynamic is beginning to reach beyond trade.

A $14 billion U.S. arms package for Taiwan has been awaiting Trump’s approval for months. After meeting Xi in Beijing in May, Trump said he was holding the package in abeyance and called it a “very good negotiating chip.”

For Beijing, few issues carry higher stakes. China claims Taiwan as its sovereign territory and has never renounced the use of force to achieve unification. Xi also pressed Trump on U.S. arms sales and Taiwan during their May meeting.

The delayed arms deal has raised concern among U.S. allies in Asia that Trump could soften Washington’s position on Taiwan in exchange for economic concessions from Xi.

But Hart said Beijing’s objective goes beyond one arms package.

“Their bigger play will be getting him to feel like he has a deal with Xi Jinping underway” in which Trump believes he needs to hold back U.S. support for Taiwan, Hart said. “They clearly have gained ground there when it comes to the $14 billion arms deal.”

Iran tests the reverse: whether China can turn relationships Washington lacks into geopolitical influence.

The U.S. has spent decades trying to isolate Tehran, while Beijing preserved economic and diplomatic ties, frequently buying Iranian oil. Xi has offered to help mediate the conflict. But neither Washington nor Tehran appears to be looking for an immediate off-ramp, limiting what Beijing can accomplish in the near term.

“This time around, especially with Iran but also with some other global issues, there is really no real coalition of countries interested in partnering with the U.S. to take care of business there,” Hass said. “It’s part of the way that Trump operates. He doesn’t really think in coalitional terms. He thinks in terms of power.”