Trump and Xi to Meet in China: What’s at Stake

Summary

WSJ What’s News – PM Edition: "Trump and Xi to Meet in China: What’s at Stake"

Date: May 12, 2026
Host: Alex Osila
Featured Guests: Chaodang (Economics Reporter), Damian Poletta (Washington Bureau Chief)

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Overview

This episode centers on President Trump’s pivotal diplomatic trip to China to meet with President Xi Jinping—the first such visit since 2017. The hosts and guests dissect the high stakes for both leaders amid fractious US-China relations, rising global inflation, trade wars, and the ongoing Iran conflict. The episode also touches on pressing US economic issues, business headlines, public safety stories, and a surprising trend in MBA program pricing.

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Key Discussion Points & Insights

1. Rising Inflation and Its Impacts

• Latest Data:
  • Inflation jumped 3.8% in April year-over-year, marking the sharpest rise in three years.
  • Energy prices surged by 18%; gasoline up 28%; airfare up 21%.
• Driving Forces:
  • Direct impact of the ongoing Iran war on energy prices.
• Consequences:
  • Paychecks are now lagging behind inflation for the first time since 2023.
  • Consumers are increasingly pessimistic.
• Policy Implications:
  • Prospects for Fed rate cuts are effectively "off the table," complicating the agenda for Trump’s Fed Chair pick, Kevin Warsh.

Memorable Quotes:

• "Energy prices, they were up 18% from a year earlier. And within that, gas... was up 28%." — Chaodang [01:51]
• "This report suggests that our economy is almost entering a new chapter where inflation appears to have stepped up." — Chaodang [01:59]
• "Investors started the year talking about potential rate cuts by the Fed and this report pretty much takes that all off the table." — Chaodang [02:54]

2. Market and Business News Roundup

• Bonds & Oil:
  • 10-year Treasury yields at a one-year high.
  • Brent crude oil jumps over 3%, topping $107 a barrel.
• Stocks:
  • Nasdaq down 0.6%, Dow up 0.1%.
• Corporate Moves:
  • Google is in talks with SpaceX to launch orbital data centers.
  • eBay rejects a $56B takeover bid from GameStop (shares: GameStop -3.5%, eBay +2%).

3. Preview: Trump-Xi Summit in Beijing

• Diplomatic Context:
  • Fragile truce in US-China trade war.
  • US embroiled in Middle East/Iran war.
  • Intensifying US-China race in AI.
• What’s at Stake for Trump:
  • Opportunity for tangible diplomatic wins ("investment... agreement on artificial intelligence") to sell domestically.
  • Risk: If prices and global crises worsen, it may undermine perception of leadership.
• Chinese Perspective:
  • Xi seeks to project China’s strength and resilience.
  • Leverage: China may resist US overtures on Iran, especially if antagonized by Trump’s tariffs or rhetoric.
• Critical Issues on the Table:
  • Chinese investment in the US—potential benefits, but security concerns linger.
  • Commitment to buy US products (e.g., soybeans) to aid US farmers.
  • Taiwan—China will aim to extract US concessions; Trump has stated he plans to discuss it.

Notable Exchanges:

• "If he has a good meeting and he comes away with some tangible things from Beijing, he could sell that to the American people, that his brand of 2026 diplomacy is still effective." — Damian Poletta [00:44]/[05:59]
• "Xi Jinping really wants to convey to the world that China is still strong, the economy is resilient, that China has some leverage here..." — Damian Poletta [06:42]
• "If President Trump decides to keep the tariffs in place or even raise the tariffs, that'll hurt the Chinese economy." — Damian Poletta [07:05]
• "One thing that we're all watching closely for is Taiwan, of course, because if the Chinese can pull Trump back a little bit from the US's support of Taiwan, that'd be a huge victory for China." — Damian Poletta [08:08]

4. Other Top News and Developments

• Public Safety:
  • Cruise ship hantavirus outbreak: 16 Americans now quarantined in Nebraska; additional cases under observation in Atlanta.
• Legal/Accountability:
  • DOJ indicts the operator (Synergy Marine) and an Indian national exec for failing safety protocols in the 2024 Baltimore Key Bridge collapse.
  • Maximum potential fines: $10B; extradition sought.
• FDA Leadership:
  • FDA Commissioner Marty Makary resigns following policy disputes and White House pressure.
• NYC Tax Policy:
  • Mayor Zoran Mamdani drops property tax hike; explores targeted tax on luxury second homes.

5. Trend: MBA Program Discounts

• Emerging Trend:
  • More business schools (Purdue, Johns Hopkins, Maryland) are offering major tuition discounts—sometimes up to 50%.
  • Motivation: Uncertainty about ROI as AI disrupts the workplace.
  • Schools are also targeting workers displaced by AI with specialized, discounted programs.

Quoted Insight:

• "Some of these schools are saying that they're offering these discounts ... because they feel like some workers out there already have had their jobs disrupted by AI." — Ray Smith [11:25]
• "No one's quite sure what the future workplace is going to look like with AI." — Ray Smith [11:12]

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Important Timestamps

• 00:33 – Show opens: Inflation headlines; Trump’s trip preview
• 01:51 – Energy-driven inflation breakdown (Chaodang)
• 02:54 – Implications for Fed policy (Chaodang)
• 03:09 – Market reaction: bonds, oil, stocks
• 05:21 – Trump departs for China; why the summit matters (Damian Poletta)
• 06:37 – Xi Jinping’s goals, Chinese leverage in negotiations
• 07:38 – Key US demands: investment, trade, Taiwan
• 08:30 – Hantavirus cruise ship outbreak update
• 09:29 – Bridge collapse indictment details
• 11:01 – MBA discounts explained (Ray Smith)

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Memorable Quotes

• Damian Poletta on Trump’s diplomatic stakes:
  "If he has a good meeting and he comes away with some tangible things from Beijing, he could sell that to the American people, that his brand of 2026 diplomacy is still effective." [05:59]

• Chaodang on inflation's bite:
  "Families are having a harder time paying for things that even if their salary paychecks are going up, it's just not keeping up with inflation." [02:31]

• Ray Smith on AI’s impact on MBA education:
  "No one's quite sure what the future workplace is going to look like with AI... people are questioning whether that's an investment they want to make." [11:12]

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Conclusion

This episode provides compact, insightful coverage of urgent economic and geopolitical headlines, emphasizing the unpredictability surrounding Trump’s high-stakes summit with Xi, the squeeze ordinary Americans are feeling from inflation, and how institutions (from MBA programs to policymakers) are rethinking their approach in a world upended by war, technology, and global rivalries.

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Transcript

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[Alex Osila]

Inflation rises to its highest level in three years. Plus, President Trump heads to Beijing for a summit with Chinese leader Xi Jinping. We'll get into what's on the table and what's at stake.

[Damian Poletta]

If he has a good meeting and he comes away with some tangible things from Beijing, he could sell that to the American people. That his brand of 2026 diplomacy is still effective.

[Alex Osila]

And criminal charges against the operator of the ship that crashed into Baltimore's Key bridge and killed six people. Alex It's Tuesday, May 12th. I'm Alex Osila for the Wall Street Journal. This is the PM edition of what's news, the top headlines and business stories that move the world today. We start the show today on a topic that's on top of mind for a lot of people, how much things cost. And it turns out they're costing more. New data from the Labor Department out today showed that inflation rose 3.8% in April from a year earlier in. It's the biggest jump in three years and clearly shows the effect of the Iran war on energy costs. Journal economics reporter Chaodang joins me now to discuss what's behind the numbers. CHAO I feel like this is what economists have been afraid of ever since the start of the Iran war, that higher gas prices would start to make their way through the economy. Is that what's driving the numbers?

[Chaodang]

Yeah, unfortunately, energy prices, they were up 18% from a year earlier. And within that, you have gas. All Americans who drive know that gas was up 28% from a year earlier. Airfare prices were up 21%. It's really all about energy. This report suggests that our economy is almost entering a new chapter where inflation appears to have stepped up. And some of the analysts I was talking to today were talking about inflation at 4, even 5% as the year goes on.

[Alex Osila]

Inflation is now growing faster than people's paychecks, and that's the first time since 2023 that that's been families are having

[Chaodang]

a harder time paying for things that even if their salary paychecks are going up, it's just not keeping up with inflation. That reflects why consumers are constantly feeling so down about the economy.

[Alex Osila]

Keeping inflation down is one of the things the Fed is supposed to be doing right. What does this new data mean for the central bank and for Trump's pick for Fed chair Kevin Warsh?

[Chaodang]

President Trump has made it pretty clear that he expects interest rate cuts. This is going to be very difficult for Kevin Warsh. Investors started the year talking about potential rate cuts by the Fed and this report pretty much takes that all off the table.

[Alex Osila]

That was WSJ economics reporter Chaodang. Concerns about inflation pushed 10 year treasury yields to a one year high. And oil prices keep rising. The global benchmark Brent crude gained more than 3% to above $107 a barrel. As for stocks, they were mixed today. The Nasdaq led losses and ended down 0.6% oil, while the Dow edged up by 0.1%. In other business news, we're exclusively reporting that Google is in talks with SpaceX for a rocket launch deal that would help Google put its own data centers in space. A deal like this would have Google and SpaceX working together even as they prepare to compete on orbital data centers. That speculative technology is at the heart of SpaceX's IPO pitch to investors. SpaceX didn't respond to a request for comment, and ebay's board has rejected an unsolicited takeover proposal from GameStop for $56 billion. The company says the offer isn't credible or attractive. GameStop CEO Ryan Cohen is a meme stock favorite, but the rollout of his campaign for ebay appears to have fizzled. One of his TV appearances left many on Wall street confused as he offered limited details on how he planned to finance the deal. Cohen has said that he's prepared to take an offer directly to shareholders if eBay isn't receptive. Shares of GameStop fell 3.5% while eBay stock added about 2%. Coming up, why some business schools are offering discounts on their MBA programs. That's after the break.

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[Alex Osila]

Today, President Trump took off for China, where he's planning to meet with Chinese leader Xi Jinping. This will be the first visit to China by a US leader since 2017, and it comes at a key moment. There's a fragile truce in the trade war between the two countries, the war in Iran, and growing competition in AI. For more on what to expect from this meeting, I'm joined now by WSJ Washington bureau chief Damian Poletta. Damian, I want to talk about what position everybody's in coming into this meeting. So President Trump has involved the US in the Middle east war with no end in sight. Courts have struck down big parts of his tariff regime. How does that affect his standing going into this summit with Xi?

[Damian Poletta]

Well, he's got a real moment here in his presidency, and he has a lot to gain because the US And China are the two biggest economic global superpowers. And if he has a good meeting and he comes away with some tangible things from Beijing, he could sell that to the American people, that his brand of 2026 diplomacy is still effective and can get results. So does he get investment in the United States from China? Does he get some kind of agreement on artificial intelligence, which has been something the US and the Chinese have been squaring off about for months? If it's a summit where there's a lot of pomp and circumstance and he comes back and gas prices are still really high and there's still a lot of problems in Iran and around the world, it might be harder for him to sell this as a victory.

[Alex Osila]

What is Chinese leader Xi Jinping coming into this meeting with and hoping to get out of it?

[Damian Poletta]

The Chinese dynamic is fascinating. In fact, I went to China many years ago when Xi Jinping had first become the leader. I traveled with the Treasury Secretary at the time. This was during the Obama administration. And to see the way the Chinese kind of put on all the pomp and pageantry just for that visit, it's going to be on such a different scale now with President Trump going. Xi Jinping really wants to convey to the world that China is still strong, the economy is resilient, that China has some leverage here because Trump's trade agenda hasn't gone the way the White House has wanted. President Trump needs China's help on Iran. And if China digs in and says they won't help, that can make it even harder for him to get a resolution to get the Strait of Hormuz open and to get gas prices to come back down. The Chinese, if they are too antagonistic, we all know President Trump won't like that. And so if President Trump decides to keep the tariffs in place or even raise the tariffs that'll hurt the Chinese economy.

[Alex Osila]

What does President Trump want from this meeting on trade, specifically from China?

[Damian Poletta]

One thing we should really be watching for is one to see if the Chinese agree to invest a lot in the United States, which would, you know, look good from President Trump's perspective because it would bring money into the United States, but at the same time could raise national security concerns about Chinese getting access to US intellectual property and things like that. We should also watch to see if the Chinese agree to purchase things like soybeans or other agricultural products, which would really help US farmers who have been battered by the trade war. One thing that we're all watching closely for is Taiwan, of course, because if the Chinese can pull Trump back a little bit from the US's support of Taiwan, that'd be a huge victory for China, and that's the kind of thing that could be on the table. In fact, President Trump even said he expects to talk to the Chinese about Taiwan during his visit.

[Alex Osila]

That was WSJ Washington Bureau Chief Damian Poletta. Thanks, Damian.

[Damian Poletta]

My pleasure.

[Alex Osila]

We have an update on the cruise ship hantavirus outbreak. Yesterday, 16Americans arrived at a biocontainment facility in Nebraska. One tested positive for the virus while the 15 others are in quarantine at the University of Nebraska Medical Center. Another couple from the cruise was taken to a biocontainment unit at Emory University Hospital in Atlanta. One of them had hantavirus symptoms. Officials said they're monitoring all cruise passengers for flu like symptoms. The passengers will be told if they can isolate at home or if they will need to stay at a facility for the full 42 day hantavirus incubation period. The Justice Department has filed criminal charges against the operator of the ship that crashed into Baltimore's key Bridge in 2024. Six construction workers died as a result. At a press conference this morning, FBI Special Agent in charge Jimmy Paul detailed the charges against the defendants, Singapore based Synergy Marine, and Radhakrishnan Karthik Nair, an Indian national who worked for both Synergy and its India based subsidiary, Synergy Maritime.

[Damian Poletta]

The indictment shows that Synergy and Radhakrishnan Karthik Nair repeatedly failed to document, investigate and report significant safety risks and hazards aboard the Dolly. They forged safety inspections and certifications.

[Alex Osila]

Synergy could face a fine of up to $10 billion. The company didn't immediately respond to a request for comment. Nair is thought to be in India and the DOJ says it will try to bring him to the US to face the charges. FDA Commissioner Marty Makary is leaving his role. He had fought with officials in the health department and the White House on many policy issues. The WSJ has learned that McCary was planning to resign today. Trump had signed off on a plan to fire McCary, as you heard on our show last week. And New York City Mayor Zoran Mamdani is abandoning his proposal to raise property taxes by nine and a half percent. That could have generated $3.7 billion for the city, but many homeowners and the real estate industry opposed it. Mamdani continues to work with New York Governor Kathy Hochul on a more targeted pied a terre tax, which would apply to second homes worth $5 million or more. And finally, business schools like those at Purdue, Johns Hopkins and the University of Maryland are holding a fire sale. They're offering discounts, sometimes as much as half off on certain programs for this fall. That's a pretty big change for one of America's most expensive graduate degrees. Ray Smith, who covers workplace and career issues for the Journal, says the trend is growing.

[Ray Smith]

We're seeing a lot of these announcements roll out this year, this week even. We're not necessarily seeing sort of like the big league, like we haven't heard from a Harvard business school yet. But, you know, we can see a lot more schools going this way. What's changed is AI. No one's quite sure what the future workplace is going to look like with AI. And so the cost of going to business school is already so expensive. When you throw AI in the mix and what it may potentially do to the future workplace, people are questioning whether that's an investment they want to make. And schools are very aware of this. Some of these schools are saying that they're offering these discounts or scholarships precisely because they feel like some workers out there already have had their jobs disrupted by AI. And so the schools are saying not only are we going to give you a discount, we're going to give you these programs that will help you if you've been displaced or if you're just feeling lost because AI is moving so fast.

[Alex Osila]

And that's what's news for this Tuesday afternoon. Today's show is produced by Danny Lewis, Anthony Bansi and Alexis Moore, with supervising producer Tali Arbel. I'm Alex Osola for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.

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