What Xi’s New Playbook for Trump Means for U.S.-China Trade

Summary

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WSJ What’s News (PM Edition)

Episode: What Xi’s New Playbook for Trump Means for U.S.-China Trade
Date: October 24, 2025
Host: Alex Osila
Key Guest: Ling Ling Wei (WSJ Chief China Correspondent)

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Episode Overview

This episode dives into the evolving diplomatic tactics of Chinese leader Xi Jinping ahead of an upcoming summit with President Trump, with a focus on shifting U.S.-China trade relations and China’s strategic use of rare earth exports. Additional segments address Intel’s business challenges and high-level maneuvering among major technology and defense players.

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Main Segment: Xi Jinping’s New Strategy Toward Trump

Key Theme

Ling Ling Wei analyzes how Xi Jinping has overhauled China’s approach to U.S. relations under Trump, moving from a reactive to a more proactive and personally tailored playbook, especially on trade, rare earth materials, and summit diplomacy.

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Discussion Highlights

• China’s Shift in Diplomatic Tactics (02:35–03:32)

  • In Trump’s first term, Xi and the Chinese government were often reactive, struggling to keep up with Trump’s unpredictable moves and pressure.

  • In the second term, Xi adopted a dynamic blend:

    • Appeasing Trump’s personal preferences
    • Asserting Chinese interests more aggressively (e.g., pushing back on U.S. policies considered harmful)
    • A “mixture of pressure and appeasement.”

  • Quote (Ling Ling Wei):

    “During Trump's first term, China was constantly in this very reactive posture... During the second term, the Chinese embraced a playbook that helped... break this very reactive posture and this involves Xi Jinping really catering to President Trump's personal likings and at the same time be very assertive and aggressive in terms of hitting back at... US Policy the Chinese leadership considers harmful. So it's a mixture of pressure and appeasement.”
    (02:35–03:32)

• Rare Earth Minerals as Leverage (03:32–04:08)

  • China’s dominance in rare earths and recent strict export controls serve as a powerful new tactic to gain leverage ahead of the summit.

  • The move is strategic, sending a clear signal to Washington and shaping the negotiating table.

  • Quote (Ling Ling Wei):

    “Earlier this month, China dramatically tightened their control over those minerals. It's also Xi Jinping's way of trying to gain leverage over Trump before this very crucial meeting in South Korea next week.”
    (03:44–04:08)

• Expectations for the South Korea Summit (04:08–05:41)

  • Fragility of U.S.-China Relationship: Despite a current trade ceasefire, tensions are high.

  • Likely Outcome: Extension of the trade truce, continued rare earth exports from China; both sides would avoid new tariffs, but full trust is lacking.

  • Risks:

    • China’s hardball tactics are stirring concerns in the U.S., Europe, and Asia about China’s reliability.
    • Aggressive moves from Beijing might embolden “China hawks” in Washington eager for a tougher stance.
    • China is keen to sidestep these more hardline U.S. policymakers.

  • Quote (Ling Ling Wei):

    “The risk of China overplaying its hand definitely is rising. The most recent rare earth measures from Beijing stirred up huge reactions, not just from the United States, but also in Europe and Asia. Because everybody was wondering if China is reliable anymore. And China's heavy handed display could embolden the very hardliners in Washington.”
    (04:45–05:41)

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Market Brief: U.S. Index Hits, Intel’s Challenges, and Tech Manoeuvring

Stock Market Snapshot (05:50–06:34)

• Major U.S. indexes (Dow, S&P 500, Nasdaq) notch record highs, buoyed by lower-than-expected inflation data.

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Intel: “Too Important to Fail?” (06:51–09:44)

Guest: Asa Fitch, WSJ Heard on the Street

• Intel’s Recent Developments:
  • Unexpected Q3 profit after long losses
  • New strategic investments from Nvidia and government/SoftBank
• Underlying Troubles:

  • Challenges in outpacing rivals TSMC and Samsung

  • Need for more than just funding: real fundamental turnaround and execution required.

  • Risks that Intel is being rewarded before it has delivered results under new leadership.

  • Quote (Asa Fitch):

    “Investors are giving Intel a lot of cash right now, which is great for Intel. Intel needs money. It's been losing money for a long time, but the fundamental problems with the business are still there.”
    (07:34–08:05)

  • Competitive Landscape:

    • Even with new chipmaking advances, competitors are not standing still; intense race continues.
    • For Intel to win, TSMC would have to stumble—an unlikely scenario, according to Fitch.

  • Quote (Asa Fitch):

    “The thing that would really help intel would be if TSMC really stumbled. And there's no real evidence that TSMC is going to stumble. Nobody is sitting still and letting intel catch up. Everybody's moving forward. So intel doesn't need to just catch up. It needs to move a lot faster than its competition.”
    (08:50–09:08)

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Defense and OpenAI Updates (09:49–12:27)

• Defense:

  • Early discussions in the White House and Navy to develop a “Golden Fleet”—modernizing warships to counter China.
  • President Trump’s involvement noted.

• Legal & Political:

  • New York AG Letitia James pleads not guilty to mortgage fraud charges, denounces Trump’s role in the legal action.

• OpenAI’s Expansion Tactics:

  • CEO Sam Altman’s aggressive deal-making is tying top chip and cloud providers (Nvidia, Broadcom, AMD, etc.) to OpenAI’s ambitions—often by leveraging fear of missing out among rival companies.

  • Quote (Berber Jin):

    “He has these natural qualities of a deal maker and a lot of these deals come down to very basic element of human psychology, the fear of missing out. ... What he's done is independently tied all of these companies to OpenAI, having them compete against one another. It very much is this kind of dance where he's daring each player to go bigger, promising them if they buy into his vision, they could end up making a lot of money.”
    (11:28–12:27)

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Memorable Quotes & Key Moments

| Timestamp | Quote/Highlight | Speaker | |-----------|----------------|-----------| | 02:35 | “During Trump's first term, China was constantly in this very reactive posture... So it's a mixture of pressure and appeasement.” | Ling Ling Wei | | 03:44 | “Earlier this month, China dramatically tightened their control over those minerals. It's also Xi Jinping's way of trying to gain leverage over Trump...” | Ling Ling Wei | | 04:45 | “The risk of China overplaying its hand definitely is rising.... And China's heavy handed display could embolden the very hardliners in Washington.” | Ling Ling Wei | | 07:34 | “Investors are giving Intel a lot of cash right now, which is great for Intel. Intel needs money... but the fundamental problems with the business are still there.” | Asa Fitch | | 08:50 | “The thing that would really help intel would be if TSMC really stumbled. And there's no real evidence that TSMC is going to stumble...” | Asa Fitch | | 11:28 | “He has these natural qualities of a deal maker... What he's done is independently tied all of these companies to OpenAI... promising them if they buy into his vision, they could end up making a lot of money.” | Berber Jin |

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Key Timestamps

• 02:35–03:32: Ling Ling Wei on Xi’s shift in diplomatic tactics toward Trump.
• 03:32–04:08: Rare earths as a new pressure point.
• 04:08–05:41: What to expect from the Trump–Xi summit.
• 07:34–09:08: Asa Fitch on Intel’s fundamental business challenges.
• 09:49–11:28: Golden Fleet defense plans, Letitia James legal update.
• 11:28–12:27: Berber Jin on Sam Altman’s deal-making at OpenAI.

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Conclusion

This episode provides a nuanced look at evolving U.S.-China relations, highlighting Xi Jinping’s adapted tactics to influence President Trump in critical trade talks. The fragility and high stakes of the relationship are underscored by China’s use of rare earth minerals and the risk of sparking further U.S. hawkishness. The episode also surveys financial market optimism, Intel’s uphill climb in the chip industry, and the behind-the-scenes competition of major tech players betting on OpenAI’s uncertain, but ambitious, future.

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Transcript

[A]

So your AI agents make your team more productive.

[B]

Right.

[A]

But if they're not connected to the rest of your business, how productive can they really make your teams? IBM helps smarter businesses get more from their AI agents. Let's create smarter business IBM. The Pentagon orders an aircraft carrier to the Caribbean, an escalation of the Trump administration's campaign to target drug smugglers there. Plus, yesterday's earnings may break a losing streak for intel, but the company's problems aren't solved yet. And how Chinese leader Xi Jinping has recalibrated his relationship with President Trump ahead of next week's summit in South Korea.

[B]

The US Seems to be trying to figure out a way to deal with the very aggressive rare earth measures put forward by the Chinese to reassert their position in this relationship.

[A]

It's Friday, October 24th. 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 begin this evening in Washington where the Pentagon has said that it's sending the Navy's most advanced aircraft carrier to the Caribbean. A Pentagon spokesman said today that Defense Secretary Pete Hegseth has ordered the USS Gerald R. Ford carrier, which is currently deployed in the Mediterranean, to the Caribbean, bringing dozens more fighter and surveillance aircraft along with other Navy warships that accompany a carrier. The dispatch of a carrier is the strongest sign yet that President Trump is serious about striking targets on land in what, according to two Navy officials, his administration has said is an effort to destroy drug smuggling operations. And Canadian Prime Minister Mark Carney told reporters today that his government is ready to resume trade talks when the US Is ready and that his government would pick up where they had left off before President President Trump ended negotiations yesterday. Tonight, President Trump heads to Asia where he's expected to meet with a number of foreign leaders. One of those, as we mentioned on this morning's show, is Chinese leader Xi Jinping. The two haven't met in person since 2019, and this summit could shake out pretty differently thanks to a new diplomatic playbook that she has embraced that's tailored specifically for Trump. WSJ chief China correspondent Ling Ling Wei is here now to discuss. Ling Ling, what was the dynamic between Xi and Trump during Trump's first term?

[B]

During Trump's first term, China was constantly in this very reactive posture. So Xi Jinping was frequently put off balance by President Trump's very high handed pressure tactics. Xi Jinping was always on the back foot. During the second term, the Chinese embraced a playbook that helped The Chinese break this very reactive posture and this involves Xi Jinping really catering to President Trump's personal likings and at the same time be very assertive and aggressive in terms of hitting back at and a US Policy the Chinese leadership considers harmful. So it's a mixture of pressure and appeasement.

[A]

One example that comes to mind involves rare earth materials which China dominates and it recently applied strict export controls over. Is that a place where we've seen this new approach play out?

[B]

Absolutely, Alex. That was the most powerful example so far. Earlier this month, China dramatically tightened their control over those minerals. It's also Xi Jinping's way of trying to gain leverage over Trump before this very crucial meeting in South Korea next week.

[A]

Right, let's talk about this meeting because it seems like it's something that the Chinese side was really pushing for. So what can we expect to come out of this?

[B]

Despite the trade ceasefire right now, the relationship is very fragile. So the most realistic outcome for now for this meeting is an extension of the current trade truce, meaning both sides still refrain from imposing higher tariffs on each other. China would continue to allow rare earth flows to the United States. The Chinese may also want reassurance from the US Side that there won't be any more policies deemed harmful by the Chinese as long as both sides are still negotiating for a broader economic deal going forward. The risk of China overplaying its hand definitely is rising. The most recent rare earth measures from Beijing stirred up huge reactions, not just from the United States, but also in Europe and Asia. Because everybody was wondering if China is reliable anymore. And China's heavy handed display could embolden the very hardliners in Washington. The Chinese want to sidestep the China hawks who are proposing much harsher policy toward China.

[A]

That was WSJ chief China correspondent Ling Lingwei. Thanks, Ling Ling.

[B]

Thank you so much.

[A]

Major US Indexes hit record highs today. The Dow rose more than 470 points or about 1%, closing above 47,000 for the first time. The S&P 500 added about 0.8% and the Nasdaq was up about 1.2%. Investor enthusiasm was buoyed after the Labor Department said that consumer prices rose 3% from a year earlier, the fastest pace since January, but below economists expectations of a 3.1% rise coming up. Why investors recent love for intel might not be enough to fix the troubled business. That's after the break.

[C]

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[A]

Investors seem to be betting that intel is too important to fail. Yesterday, the company reported an unexpected profit for its third quarter, driving up its stock price. But Intel's recent successes don't guarantee that the company will ultimately succeed. Its third quarter profit is the first after six straight quarterly losses, the longest such streak in decades. For more, I'm joined now by WSJ Heard on the Streetwriter Asa Fitch. ASA intel has had a lot of good news this year. In addition to that positive third quarter, it got an equity investment and partnership with Nvidia last month and an investment earlier this year from the U.S. government and SoftBank. And yet you're right that that might not be enough to fix the company. Why is that?

[C]

Investors are giving Intel a lot of cash right now, which is great for Intel. Intel needs money. It's been losing money for a long time, but the fundamental problems with the business are still there. The company has fallen behind its rivals, TSMC in Taiwan and Samsung in South Korea. This money doesn't really allow it by itself to come back. So investors are really rewarding intel before it's shown a real sign of executing a turnaround under its new CEO.

[A]

Are there signs that intel is catching up to those rivals?

[C]

Intel has had some good news on the manufacturing side recently with its most advanced chip making process with the smallest transistors. But tsmc, the leader in chip making in the world, has a competitive process that's on the way. It's not clear how intel will measure up to that. What's more concerning is how intel is going to make a business out of these new chips. In the chip industry, it's not just enough to be able to make a great chip, it also has to make financial sense. If you're running factories that produce chips that cost a ton of money to make, your margins are going to be pretty slim.

[A]

What would need to happen in this competitive space for intel to get a leg up here?

[C]

The thing that would really help intel would be if TSMC really stumbled. And there's no real evidence that TSMC is going to stumble. Nobody is sitting still and letting intel catch up. Everybody's moving forward. So intel doesn't need to just catch up. It needs to move a lot faster than its competition.

[A]

So Intel's got all this investment. What can we expect to see from the company in the coming year or so?

[C]

So next year will really be a test of how Intel's newest chips, its new manufacturing process, performs in the world. People have a lot better sense of how it's doing from a performance standpoint. It's up to intel to try to prove that they can work in this field and also they need to prove they can attract external customers, the likes of Nvidia or Apple, to actually come in and use its chips that are made in its factories.

[A]

Wall Street Journal heard on the street writer Asa Fitch, thanks so much.

[C]

Thank you.

[A]

In other news, we're exclusively reporting that senior White House and Navy officials are in early discussions to replace the current mix of warships with a new fleet that that would be better suited to counter China and other potential future threats. That's according to former and current officials. The officials also said that President Trump, who has previously criticized the look of modern warships, is involved in the plans. The people said that the new fleet, which Navy officials have dubbed Golden Fleet, would be made up of a number of large warships outfitted with more powerful long range missiles along with smaller ships and New York Attorney General Letitia James pleaded not guilty to charges of mortgage fraud in court in Virginia today, where a judge said that the trial would begin January 26th. Speaking outside the courthouse after the proceeding, James said Trump, who had urged the Justice Department to prosecute her, was abusing the legal system for political gain. And finally, to achieve his vision of securing seemingly endless computing power for OpenAI, its CEO Sam Altman has gone on a deal making blitz. He's played the egos of Silicon Valley's giants off one another, resulting in a game of financial one upmanship that has tied the fates of the world's biggest semiconductor and cloud companies and vast swaths of the US economy to OpenAI. All of them are now betting on the success of a startup that is nowhere near turning a profit and facing a mounting list of business challenges. Berber Gin, who covers startups and venture capital for the Journal, told our Tech News Briefing podcast how Altman is able to convince these companies to bet money on him.

[D]

This is kind of what Altman loves to do. He's been doing it his whole career. He was a venture capitalist before becoming CEO of OpenAI. He's very good at selling a vision as well. He has these natural qualities of a deal maker and a lot of these deals come down to very basic element of human psychology, the fear of missing out. We reported that after Sam Altman and Masayoshison announced Stargate at the White House, that caught the attention of Jensen Huang at Nvidia and that kicked off the discussions that culminated in this huge hundred billion dollar deal announced last month. And he was talking as well to Broadcom and amd. What he's done is independently tied all of these companies to OpenAI, having them compete against one another. It very much is this kind of dance where he's daring each player to go bigger, promising them if they buy into his vision, they could end up making a lot of money.

[A]

To hear more from Berber, listen to today's episode of Tech News Briefing. And that's what's news for this week. Tomorrow you can look out for our weekly Markets wrap up. What's news in Markets? Then on Sunday, we'll be discussing the expanding universe of survival prep and how in a world filled with growing threats, governments and people are increasingly finding that being prepared is just plain prudent. That's in what's New Sunday and we'll be back with our regular show on Monday morning. Today's show is produced by Pierre Bienname and Zoe Kulkin with supervising producer Jana Herron. Michael Lavalle wrote our theme music. Jessica Fenton is our technical manager, Aisha El Musleam is our development producer, Chris Zinsley is our deputy editor and Falana Patterson is is the Wall Street Journal's head of news Audio. I'm Alex Osala. Thanks for listening.

[C]

What's driving the markets this week? What's on investors minds as they look ahead? Find out on the Markets podcast from Goldman Sachs. A breakdown of market moves and macro signals in 10 minutes or less. The Markets podcast from Goldman Sachs. Listen now.