Like almost everything Trumpian, it begins with plenty of pomp and circumstance, excess, and ends with a whimper. The recent Washington summit between Donald Trump and Chinese President Xi Jinping could also be characterized in the same manner, with a red carpet treatment for Xi at Joint Base Andrews, a lavish state dinner, and plenty of over-the-top optics, such as a B-1 bomber flyover. But lost in what critics called “diplotainment” were specific, tangible summit outcomes.
Only at the tail end of the Trump-Xi meeting did the two countries issue an eight-point consensus on a variety of topics, including technology, security, cultural exchange, and trade. However, as to be expected, it was underwhelming. First, the US and China agreed to a two-month extension of their trade truce, pushing back the deadline to January 2027, which in the short-term gives economic advisors and negotiators more time. There was also $30 billion in reciprocal tariff reduction on goods like timber, medical devices, tableware, and holiday decorations. 90 percent of the items, according to the Chinese Commerce Ministry, would be subject to most-favored-nation levels.
But for Southeast Asian countries like Vietnam, Thailand, and Malaysia, the machinations and procrastinations of great powers have consequences. For Hanoi, prior to the trade truce, duties on goods were 20 percent compared to the 60 percent US tax on Chinese goods. However, the US Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) did not allow for broad, sweeping tariffs. Thus, both China and Vietnam pay a 12.5 percent rate, with China’s burden increasing to 37.5 percent on forced-labor tariffs.
Vietnam still maintains an advantage, but the gap is narrowing. Extending the trade truce until January preserves this temporary advantage for Vietnam, but that does not mean it is not dangerously exposed to US pressure, which means that the prolonged dispute will only force Hanoi to delicately handle a mercurial Trump as it seeks to preserve its fragile trade balance.
Malaysia is also caught in the middle. It welcomed the summit’s truce, as it preserved an awkward balance in manufacturing. Any trade deescalation will protect its electronics sector from unnecessary supply chain disruptions. The tensions have prompted a move toward economic diversification, as Malaysia cemented its place as a BRICS partner country in 2024. A protracted trade war only puts Kuala Lumpur closer to Beijing, and dampens further ties to the United States that were somewhat promising under the Biden Administration.
The other area of great concern has been the advance of artificial intelligence, as some experts warned that the existential threats to humanity have grown and that guardrails needed to be placed on AI and tech companies in this new “arms race.” However, the Trump-Xi summit failed to negotiate any protections, rather establishing a preliminary AI dialogue to exchange views. However, the lack of substantive dialogue on AI compounds the risks for other middle powers.
Thailand is prime among them. Bangkok had been accelerating its ties to US companies, including Microsoft, and had actively courted American investors. It also moved closer to China, signing agreements in semiconductor investments and data as it seeks to move into the space with an $80 billion investment and a target of 230,000 high-skilled jobs by 2050.
However, as the AI war of influence and pressure continues, Thailand is forced to make difficult choices, as it cannot maintain a neutral position amid heated great power dominance in AI. In May, the Trump administration suspected that a Thai firm was shifting billions in AI Nvidia chips to Chinese firms. The case demonstrates that the intensification of pressure offers temptations. Thailand desperately needs data center and AI investments from the US, but it lacks the regulatory and enforcement capacity to prevent Chinese firms from exploiting weaknesses and gaining access to US chips.
The only alternative for Thailand is to push for more regional AI governance through the Asia-Pacific Economic Cooperation (APEC), but this is well behind the pace needed for relief. And while Thailand’s neutrality or loyalties would not be determined by the outcome of the Trump-Xi summit, the lack of substantive dialogue only serves to highlight what remains at stake for middle powers caught between technology and investment needs and a lack of clarity on what happens next.