Duo’s lingo: what to watch for in Trump-Xi summit

Summary

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Economist Podcasts – "Duo’s lingo: what to watch for in Trump-Xi summit"

Date: May 13, 2026
Hosts: Jason Palmer, Rosie Blore
Notable Guests: Simon Rabinovich (Beijing Bureau Chief), Shira Aviona (Business writer), Alexandra Sewich Bass (Culture editor)

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Episode Overview

This richly-packed episode of The Intelligence from The Economist delves into the highly anticipated Trump-Xi summit in Beijing, the shifting fortunes in the age-old Coke vs. Pepsi rivalry, and the contentious political climate at the Venice Biennale. The primary focus is on the global significance and delicate balancing act at the upcoming US-China summit, with expert analysis on expectations, trade tensions, and geopolitical stakes.

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Key Segment 1: Trump-Xi Summit – High Stakes, Low Expectations

Timestamps: 02:07–10:05

Main Context

• The Trump-Xi two-day summit in Beijing is the first meeting of four planned for 2026—a reflection of just how urgent and tempestuous US-China relations have become.
• This meeting follows a period of dangerous escalation: by early 2025, both countries imposed steep tariffs (over 100%), threatening bilateral trade and the global economy.
• A fragile truce, set to expire in November 2026, has set the stage for renewed diplomacy.

Notable Quotes & Insights

• On relations in 2025:
  Simon Rabinovich:

  “China and America have been in an on again, off again trade war going back to Donald Trump’s first term. … At the start of 2025, things were looking really quite dangerous. We got to a point where both countries had tariffs of more than 100% on each other.” (03:10)

• On current expectations:
  Simon Rabinovich:

  “At this point, nobody really expects that grand bargain. I think the reality has set in, which is that there is just a lot of mutual suspicion.” (04:18)

What's Likely On The Agenda

• Trade & Economics:

  • China expected to announce purchases of “the three Bs” from the US: Boeings, beef, and beans (soybeans).
  • Talk of establishing a “board of trade” to identify goods eligible for low tariffs and to engineer a more balanced trading relationship.
  • Trump’s goal: reduce US trade deficit; China’s surplus dropped from $450B (2018) to $200B, a sign of some progress.

• Taiwan – A Flashpoint:

  • China will push the US to clarify its position, hoping Trump will actively oppose Taiwanese independence and reduce arms sales.
  • American diplomats are wary of the risk Trump might agree to shifting language or policies.

    “From China’s perspective, they’ve made it clear to the Americans that the more that America gives on Taiwan, the more that China is willing to give on the economy.” (06:01) “So there’s going to be a big dance back and forth between the two leaders and then potentially on the American side to interpret or reinterpret whatever Donald Trump actually does or says on Taiwan.” (07:10)

• Other Security Issues:

  • Russia & Ukraine: The US wants China to rein in Russia—so far, China remains non-committal.
  • Iran War: China, once Iran’s main economic partner, is reluctant to intervene openly but may apply quiet pressure to reopen the Strait of Hormuz.

Summit Outcomes: What’s at Stake?

• A “strong agreement” on avoiding further tariff escalations would mark success.
• Mutual disarmament on export controls, progress on flashpoints like Iran, or even just maintaining dialogue would move the relationship forward.
• Significance: This is the first American leader’s visit to China in almost ten years.
  Simon Rabinovich:

  “The simple fact that the meeting is taking place, that Xi Jinping and Donald Trump are talking, that is important in and of itself.” (09:25)

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Key Segment 2: Coke vs. Pepsi – A Century-Long Rivalry in Flux

Timestamps: 11:24–16:07

The Battle Erupts Again

• Current Market Dynamics:

  • Coke: ~17% of US soft drink market; Pepsi: 11%.
  • Since 2023: Coca-Cola’s market cap up 20%; Pepsi down 15%.

    “Coca Cola’s brands together account for about 17% of the American soft drink market and Pepsi’s just 11%. … Since the start of 2023, Coca Cola’s market capitalization has risen about 20%. At the same time, Pepsi’s has slumped by 15%.” – Shira Aviona (12:45)

• Strategic Divergences:

  • Pepsi derives over half its revenue from packaged foods (e.g., Frito Lay, Quaker Oats), unlike beverage-focused Coke.
  • Pepsi’s aggressive price hikes in packaged foods post-pandemic turned away consumers.

• Health Trends & Consumer Shifts:

  • Americans are wary of ultra-processed foods and increasingly use weight loss drugs (GLP1s), reducing soda and snack sales.
  • Diet/sugar-free drinks remain popular—Coke leads with Americans drinking 2.5x more Diet Coke than Diet Pepsi.

    “Coke has also been much better than Pepsi at kind of taking advantage… So they were much earlier, for example, to selling protein shakes.” – Shira Aviona (13:53)

• Pepsi’s Fightback:

  • Pressure from activist investors led to product streamlining, price reductions, and manufacturing changes.

  • First quarter of 2026: Pepsi’s operating profits up 24%—outperforming Coke.

  • Successful defense of its #2 position (ahead of Dr. Pepper) and acquisition of healthy soda brand Poppy for $2 billion.

    “A comeback is mounting. … the battle is going to continue.” – Shira Aviona (16:05)

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Key Segment 3: Venice Biennale – High Art, High Tensions

Timestamps: 16:24–23:34

Main Points & Atmosphere

• The 61st Venice Biennale is marked by irony and controversy—amid pink flowers, music, and spectacle, thorny politics dominate.

• Russia’s return to the Biennale (after two absences, amidst the ongoing war) sparked boycotts and funding withdrawals.

  • The European Commission pulled 2M euros in funding; several countries boycotted the opening.
  • For the first time, the prize jury resigned, refusing to consider countries charged with war crimes (Israel and Russia); some awards now chosen by popular vote.

• Exhibition Politics:

  • Russia’s pavilion was open for previews only, then shuttered.
  • Israel’s pavilion officially “closed for construction,” with a smaller exhibition in the Arsenale.
  • South Africa canceled its official participation after controversy over a Palestinian poet’s inclusion; the excluded artist’s show found a “radical refuge” in a nearby church.

• Art in a Time of Conflict:

  • Many pavilions reflect contemporary issues; Ukraine’s entry, "Security Guarantees," features a sculpture referencing broken promises from the 1994 nuclear deal.

    “The subject is heavy, the work is creative, and even beautiful. People stop briefly to contemplate it and then head off, presumably in the direction of Austria.” – Alexandra Sewich Bass (23:27)

• Critical Reflections:

  • This is described as the most chaotic and contentious Biennale since 1968.
  • The festival faces criticism and existential questions about its structure and ability to grapple with modern-day politics and ethics.

• Memorable Quote:

  “It’s a moment in which the Biennale is having to contend with the fact that it’s not separate and apart from the world. … We are now going through a particularly fraught moment where these fault lines are surfacing.” – Alexandra Sewich Bass (21:10)

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Notable Quotes by Timestamp

• “China and America have been in an on again, off again trade war going back to Donald Trump’s first term.” – Simon Rabinovich, 03:10
• “At this point, nobody really expects that grand bargain. I think the reality has set in, which is that there is just a lot of mutual suspicion.” – Simon Rabinovich, 04:18
• “Coca Cola’s brands together account for about 17% of the American soft drink market and Pepsi’s just 11%. … Since the start of 2023, Coca Cola’s market capitalization has risen about 20%. At the same time, Pepsi’s has slumped by 15%.” – Shira Aviona, 12:45
• “A comeback is mounting. … the battle is going to continue.” – Shira Aviona, 16:05
• “It’s a moment in which the Biennale is having to contend with the fact that it’s not separate and apart from the world.” – Alexandra Sewich Bass, 21:10

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Timestamps for Key Segments

• Trump-Xi Summit Analysis: 02:07 – 10:05
• Coke vs. Pepsi: 11:24 – 16:07
• Venice Biennale: 16:24 – 23:34

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This episode offers nuanced reportage and a clear-eyed look at three seemingly disparate, but globally significant, stories—each shaping the current international, business, or cultural climate in their own way.

Transcript

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[Jason Palmer]

The economist. Hello and welcome to the Intelligence from the Economist. I'm Jason Palmer.

[Rosie Blore]

And I'm Rosie Blore.

[Jason Palmer]

Today on the show, the latest in the century long Coke versus Pepsi battle and a curtain raiser on a particularly fraught Venice Biennale.

[Narrator/Voiceover (Dell PC Ad)]

First up though,

[Rosie Blore]

Tomorrow Donald Trump and Xi Jinping will meet in Beijing. The two day summit, originally scheduled for April, was delayed by the Iran war. Even so, both sides seem determined to make it. The meeting is the first of four between Trump and Xi planned for this year, a sign of the urgency both sides feel about calming this consequential but often tempestuous relationship.

[Simon Rabinovich]

The Chinese American relationship was in a really, really bad way last year. They were on the brink of a massive economic conflict that really threatened a global recession.

[Rosie Blore]

Simon Rabinovich is our Beijing bureau chief and Chaoguan columnist.

[Simon Rabinovich]

They've walked back from the ledge of that and the question for this year is are they going to be able to build something bigger, more constructive and more sustainable out of that?

[Rosie Blore]

So just fill in a bit more of that context for us for a minute. Simon why were US China relations quite so bad?

[Simon Rabinovich]

So China and America have been in an on again, off again trade war going back to Donald Trump's first term. And at the start of 2025, things were looking really quite dangerous. We got to a point where both countries had tariffs of more than 100% on each other, effectively threatening a stop to all bilateral trade. At the same time, China was fighting back with much more force than it had ever done previously. It put export controls on rare earths, which were threatening to bring not just American industry, but global industry to a total halt. That caught Donald Trump's attention. And that's why by the end of last year, they had agreed to a truce. It's a truce that only runs until November of this year. And so we're now at the point where diplomacy is once again underway. They're trying to come to some kind of a more lasting trade deal, economic arrangement that will avoid the kinds of problems that we saw last year.

[Rosie Blore]

So if you've got to the point where diplomacy is key, what can we actually expect from this summit?

[Simon Rabinovich]

Well, depending on when you would have asked me that question, the answer would have been different. A few months ago, people had quite high expectations. They thought that maybe there was going to be some big bilateral investment agreements, that maybe there was going to be some way to strike a quote, unquote, grand bargain between China and America. At this point, nobody really expects that grand bargain. I think the reality has set in, which is that there is just a lot of mutual suspicion. So that's why I think expectations are quite low. And basically what they're trying to avoid is having a total breakdown.

[Rosie Blore]

So what might they actually achieve now then?

[Simon Rabinovich]

So the focus of the summit really is going to be on trade. On economic issues, the Chinese are very likely to announce some big purchase agreements. They've talked about buying the three Bs from America, Boeings, beef and beans, soybeans on the American side, they want trade to be more balanced. Donald Trump's goal, one of his big goals, is to reduce America's trade trade deficit. So there's talk about creating something called a board of Trade, which would basically look at what goods can flow between the countries with relatively low tariffs. Can they somehow bring about managed trade to engineer a more balanced trading relationship to bring down the Chinese trade surplus? By the way, at the start of the trade war in 2018, China ran a roughly $450 billion trade surplus against America. These days, it's about 200 billion DOL. As far as Donald Trump is concerned, his tactics have been somewhat successful to date.

[Rosie Blore]

Simon, the focus may be on Trade. But all sorts of other topics are likely to loom. What else can we expect?

[Simon Rabinovich]

Well, the big one that the Chinese side are pushing is to bring Taiwan into the discussion. So from China's perspective, they've made it clear to the Americans that the more that America gives on Taiwan, the more that China is willing to give on the economy. So what do they mean by giving on Taiwan? What they would like Donald Trump to come out and say is that America actively opposes Taiwanese independence. For the time being, America's had a very ambiguous policy. At the same time as not offering that kind of vocal support to Taiwan, it's been selling a lot of weapons to Taiwan, which is the way that the island is able to defend itself from a potential attack from China. So China would also like to see America either halting or significantly reducing its arms sales to Taiwan. So one of the things that China will be trying to use the summit for is getting Xi Jinping into a room with Donald Trump and basically trying to make the case that Donald Trump, you can be an architect of global peace if you change America's language, if you change America's stance on Taiwan. From the American perspective, American diplomats and many officials are very concerned that Trump might just do something like that. So they've been very clear to say that Taiwan is not up for negotiation. So there's going to be a big dance back and forth between the two leaders and then potentially on the American side to interpret or to reinterpret whatever Donald Trump actually does or says on Taiwan.

[Rosie Blore]

And what about other security issues?

[Simon Rabinovich]

Well, the two obvious other security issues which are actually ongoing zones of conflict right now are Iran and Russia, Ukraine. So in Russia's case, America has consistently been trying to get China to reign in Russia. So far, though, China has not done that. And I think there's little reason to think that they're about to change their tune on that. Right now, Iran is more interesting because, first of all, that's a war that America started. China is very intent to basically be on the sidelines. America knows that China could do more. China was Iran's biggest economic partner prior to the war, buying 90% of Iranian oil, the biggest foreign investor into Iran. And so America would like China to use some of its haft to get Iran at the negotiating table, make more compromises, move more quickly to reopen the Strait of Hormuz from the Chinese part. They do not want to get entangled in this conflict. So we'll see after this meeting whether China, in his very quiet, very diplomatic way, behind the scenes does put a bit more pressure on Iran to bring this to an end, to reopen the strait.

[Rosie Blore]

Simon, you've outlined a laundry list of thorny topics. It seems like the best case scenario for this week's summit might simply be that it happens that things are stable.

[Simon Rabinovich]

Well, I mean, the best case scenario is that you do get some kind of strong agreement on economic ties. Nobody expects that tariffs will be removed, but at least certainty that they're not going to go up again, some kind of mutual disarmament on export controls, movement on Iran and Russia. But you're absolutely right that the simple fact that the meeting is taking place, that Xi Jinping and Donald Trump are talking, that is important in and of itself. Remember, this is the first time that an American leader has visited China in nearly one decade. It's a crazy, crazy situation for the world to be in, to have that lack of dialogue. The expectation is that the leaders will meet three more times this year. Xi Jinping will visit America probably in August or September for a bilateral meeting. They then will meet on the sidelines of APEC in China and G20 in America. And so the state of the relationship is going to hinge to a great degree on this meeting, starting off on a positive note and hopefully building up momentum for the next few meetings over the course of the year. So this is a really, really important step forward. And let's see what comes out of the next two days.

[Rosie Blore]

Simon, thank you very much.

[Simon Rabinovich]

Thank you, Rosie.

[Rosie Blore]

And if you want to hear more on what to expect from this summit, you can listen to the current episode of Checks and Balance, our weekly U.S. pODC. And on next week's episode of Drum Tower, our China podcast, we'll be analyzing how the great meeting went.

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[Alexandra Sewich Bass]

I'd like to buy the world a home and furnish it with love.

[Shira Aviona]

In America, there have been few business Rivalries as fierce and long lasting as that of Coca Cola and Pepsi.

[Jason Palmer]

Shira Aviona writes about business for the Economist.

[Shira Aviona]

For more than a century, the pair have fought it out for dominance of the fizzy drinks market.

[Simon Rabinovich]

Coca Cola says it's the real thing. But Pepsi Cola believes that when it comes to colas, the only real thing is taste. That's why the Pepsi Challenge has been asking thousands of people across the country

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to let their own taste decide.

[Shira Aviona]

And the fact is they've used advertisements, publicity stunts. But today, one of those two soft drinks giants has begun to lose its fizz.

[Jason Palmer]

Ooh, do go on. Tell me more about this fizzy rivalry.

[Shira Aviona]

So a few years ago, the value of the two rival businesses, Coca Cola and Pepsi, began to diverge. Coca Cola has been doing pretty well, and Pepsi has been struggling for a while. It even prompted fears that Dr. Pepper might knock Pepsi off its spot as the US's second largest producer of soft drinks.

[Jason Palmer]

So before we get into how the gap is opening, tell me what the market share looks like at the moment.

[Shira Aviona]

The state of play today is that all of Coca Cola's brands together account for about 17% of the American soft drink market and Pepsi's just 11%. But if you look at their market value, it tells an even starker story. So since the start of 2023, Coca Cola's market capitalization has risen about 20%. At the same time, Pepsi's has slumped by 15%.

[Jason Palmer]

And why is that?

[Shira Aviona]

One key thing to understand is that Coke and Pepsi have become quite different businesses from one another. So in addition to producing drinks, Pepsi actually makes more than half of its revenues from packaged food because it owns Frito Lay and sells things like lay's chips and Quaker Oats. And like many other food companies, in the kind of post pandemic period, as they experienced rising cost of inputs, they raised prices on many packaged foods, well above the average of its competitors, but also above food inflation as a whole. And shockers in response fled.

[Jason Palmer]

So that explains the gap then. Essentially, Pepsi becoming a different kind of business. And one big part of that business has gone south.

[Shira Aviona]

Well, there's actually more to it. So another thing that has really hurt Pepsi is that as of late, consumers have become very concerned about ultra processed food in particular. And more recently, as we've seen a boom in the use of weight loss drugs that has also been starting to affect both food and soda consumptions. So we know, for example, that Americans who are taking GLP1s seem to reduce their purchases of soft drinks by about 7%. But the kind of health conscious consumer isn't stopping buying soda totally. In fact, they seem to prefer sugar free soda. And that's yet another area in which Coca Cola leads Pepsi. So in diet drinks, for example, Americans are guzzling about two and a half times more Diet Coke than Diet Pepsi. But Coke has also been much better than Pepsi at kind of taking advantage of figuring out what drinks health conscious consumers might want to buy. So they were much earlier, for example, to selling protein shakes.

[Jason Palmer]

And so what is Pepsi doing to catch up? It seems to be losing out on a number of fronts here.

[Shira Aviona]

Last September, Pepsi got a letter from Elliott Management, a notable activist investor, demanding that they take all sorts of steps to transform their business. And thus far, Pepsi has been taking the hint. So they are trying to slim down their portfolio of products, they've agreed to lower prices, and they're trying to streamline their manufacturing. And there have been early signs that the turnaround is working. So in the first quarter of 2026, they reported that operating profits were up 24% over last year, which is actually higher than what Coca Cola reported for the same period. They've managed to bat away Dr. Pepper and have retained their number two spot for now. And last year they acquired acquired a popular healthy soda brand, Poppy, for $2 billion, which is helping to boost sales. So a comeback is mounting. And what that means for Pepsi versus Coke is that the battle is going to continue.

[Jason Palmer]

Shira, thanks very much for your time.

[Shira Aviona]

Thank you so much, Jason.

[Alexandra Sewich Bass]

The Russian pavilion at the 61st edition of the Venice Biennale was supposed to be a party.

[Rosie Blore]

Alexandra Sewich Bass is our culture editor.

[Alexandra Sewich Bass]

And the trappings were all there. An open bar, resplendent pink flowers, musicians, scheduled DJ sets. And yet something was amiss. Irony was everywhere, yet acknowledged nowhere. Why do flowers no longer smell? Was the title of a climbing artwork. Flowers. And yet when you walked up to them, they did in fact, smell rather lovely. There was a lineup of traditional Russian musicians that seemingly had nothing to do with the artwork. And on the ground floor, there was a bin filled with a jumble of clothes thing, which was not intended to evoke Ukrainian refugees displaced by Russia's war. But of course, who could think of anything else? The Venice Biennale has recently opened, and this year the theme is in minor keys. In fact, the Biennale has opened to a soundtrack of discord. The festival decision to allow Russia to host an exhibition after being absent for the last two installments has set off a furor, resulting in the European Commission pulling 2 million euros worth of funding and leaders from several countries boycotting the opening. And for the first time in history, the prize giving jury has resigned after announcing it would not consider countries facing war crime charges, namely Israel and Russia. Because there are no judges, they've now opted to choose the winners of certain prizes by a popular vote. Which is more suited to American Idol than high art? The Biennale was founded in 1895 to celebrate the 25th wedding anniversary of King Umberto and his wife and to display the strength of Italy, unified only a few decades earlier. Ever since, the art world, Olympics have reflected the wills and woes of their era. One art historian told me this is the most chaotic and contentious biennale since 1968, when student protesters targeted the event. The Biennale's organizing body is ill equipped to manage the hard issues of free speech, propaganda and participation that have been plaguing a lot of arts institutions. A compromise that has pleased no one is that Russia's pavilion was permitted to open for previews, but will remain closed for the main event. Israel's permanent pavilion is shut, supposedly for construction, with police standing guard outside. Instead, Israel has been permitted a space in the Arsenale, former shipyards, where it is harder to stage protests because of narrower aisles. There, an artist has set up a pool of water with pipes dripping into it, which, quote, invites viewers into a contemplative environment. South Africa's culture minister tried to convince its artist, Gabriel Goliath, to remove a Palestinian poet from her work. When she refused, she was told she could no longer participate in the Biennale. In the end, after trying to cancel Ms. Goliath, South Africa canceled its pavilion. Instead, a nearby church offered what Ms. Goliath calls a radical refuge for her show Elegy. It features videos of women singing a single note on loop to honor women who have been killed. The church's acoustics make it all the more haunting. It's a moment in which the Biennale is having to contend with the fact that it's. It's not separate and apart from the world. I think it's a model that many have found problematic for many years and have been thinking about ways in which it could be dismantled and remade. But yes, we are now going through a particularly fraught moment where these fault lines are surfacing. Elsewhere. Globalization has given way to localization. This year, Spiennale is more inward looking. This year, America's pavilion changed things up. It required the artists who were applying to be included to focus on American values, and they were forbidden from mentioning diversity, equity and inclusion. For the first time, the government did not work with a National Endowment for the Arts, the agency that typically vets proposals and instead went with a new nonprofit run by a woman who used to oversee a pet food firm. I spoke with Jeffrey Uslip, the curator, about the show.

[Simon Rabinovich]

We're not telling people what to think. Each artwork is in a constant state

[Alexandra Sewich Bass]

of becoming, and the encounter between the

[Simon Rabinovich]

beholder and the sculpture is unique, has to be. You have to have a unique, lived experience between the two. 2 I don't believe you can think your way out of a problem.

[Alexandra Sewich Bass]

Alma Allen, whose sculptures were chosen for this year's Biennale, has something to say, although it's not exactly clear what. Fittingly for such supercharged times, the most popular art in Venice involves spectacle and live performance. In the lead up to the opening, hundreds swarmed Austria's pavilion to see SeaWorld Venice, which features naked women. One rings a bell with her body another sits in a tank of water with a scuba mask connected to portable toilets, which guests can use. However, the best works do not divert your attention, but focus it Ukraine's excellent contribution, Security guarantees greets guests when they arrive in the Giardini, a hulking sculpture of an origami deer is suspended from a truck. The title refers to promises from America and others to protect Ukraine when it agreed to give up its nuclear arsenal in 1994. The artist Jana Kadyrova removed her sculpture where it had been on display close to the war's front line and drove it across Europe, documenting the stops along the way. Since then, the city has been flattened by Russia's bombardment. The subject is heavy, the work is creative, and even beautiful. People stop briefly to contemplate it and then head off, presumably in the direction of Austria.

[Jason Palmer]

That's all for this episode of the Intelligence we'll see you back here tomorrow.

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