--- title: "Trump and Xi's BIT Talks | Model Diplomat" description: "Trump and Xi's summit may hinge on a bilateral investment treaty, with both sides eyeing trade rules that could stabilize a strained US-China relationship." url: "https://modeldiplomat.com/story/trump-and-xis-bit-talks-a-path-to-stability" --- # Trump and Xi's BIT Talks Exploring the potential of a bilateral investment treaty. Model DiplomatMay 7, 20263 min readNorth America [The EconomistThe pact that could help America and China repair relations](https://www.economist.com/by-invitation/2026/05/07/the-pact-that-could-help-america-and-china-repair-relations)[The EconomistAmerica and China prepare for an Alpine trade clash](https://www.economist.com/finance-and-economics/2025/05/07/america-and-china-prepare-for-an-alpine-trade-clash)[EcnsChina, U.S. scheduled to hold trade talks](https://www.ecns.cn/news/politics/2025-05-08/detail-iherfyrs7208134.shtml) ## Trump-Xi BIT Talks Offer the Narrowest Way Back to Stability *\[A bilateral investment treaty could hand Trump and Xi a face-saving win, but only if they can ring-fence sensitive sectors from the wider rivalry.]* **Washington and Beijing both want the summit**, but for different reasons. The Economist says Donald Trump and Xi Jinping are set to meet in Beijing on May 14-15 after a prior October 2025 meeting that eased tensions only slightly, and argues that the most useful deliverable would be a bilateral investment treaty, or BIT [The Economist](https://www.economist.com/by-invitation/2026/05/07/the-pact-that-could-help-america-and-china-repair-relations "economist.com"). Reuters, reporting through Al Jazeera, says U.S. Trade Representative Jamieson Greer is instead describing a possible “board of trade” and “board of investment” to decide what the two sides can sustainably exchange without crossing national-security red lines [Reuters](https://www.aljazeera.com/economy/2026/4/7/trump-to-pursue-stability-with-chinas-xi-in-may-meeting-ustr-greer-says "aljazeera.com"). That is the real bargain on offer: not reconciliation, but a rules-based pause in the fight. ## Why a treaty is attractive A BIT works because it gives each capital something it can sell at home. For Trump, a framework that preserves stability while keeping substantial tariffs in place lets him claim he is managing China without surrendering leverage; Greer said the administration wants to maintain that stability and keep access to Chinese rare earths [Reuters](https://www.aljazeera.com/economy/2026/4/7/trump-to-pursue-stability-with-chinas-xi-in-may-meeting-ustr-greer-says "aljazeera.com"). For Xi, a treaty is a way to press Washington for clearer rules on investment and fewer arbitrary roadblocks to Chinese firms, which is why the Economist frames the BIT as a way to find middle ground in sensitive sectors [The Economist](https://www.economist.com/by-invitation/2026/05/07/the-pact-that-could-help-america-and-china-repair-relations "economist.com"). The beneficiaries are not the diplomats. They are multinational companies, supply-chain managers and financial markets that have spent the past year pricing in a worse break between the world’s two largest economies. The losers are the hardliners in both capitals who prefer decoupling, because a BIT assumes the relationship will continue — just under narrower, more controlled terms. Reuters’ reporting makes that clear: the proposed investment mechanism would handle specific roadblocks to company investment, not rewrite the whole strategic relationship [Reuters](https://www.aljazeera.com/economy/2026/4/7/trump-to-pursue-stability-with-chinas-xi-in-may-meeting-ustr-greer-says "aljazeera.com"). ## The constraint is politics, not economics The economics are straightforward; the politics are not. Brookings notes that both sides see summit diplomacy as a way to prolong fragile stability, and that Beijing wants the relationship framed around mutual respect and future engagement rather than one-off concessions [Brookings](https://www.brookings.edu/articles/beyond-trade-what-trumps-china-trip-must-achieve/ "brookings.edu"). That is why a BIT is the only plausible near-term instrument: it avoids the hardest files — tariffs, export controls, Taiwan, and industrial policy — while still letting both leaders claim progress. But a treaty only works if it survives domestic scrutiny. In Washington, lawmakers hostile to Chinese electric vehicle and critical-infrastructure investment will treat any opening as a security risk. In Beijing, officials will not sell a deal that looks like capitulation to U.S. screening or technology controls. So the treaty’s value is less in its legal text than in the signal it sends: the two sides are still managing competition through institutions, not pure escalation [The Economist](https://www.economist.com/by-invitation/2026/05/07/the-pact-that-could-help-america-and-china-repair-relations "economist.com"). ## What to watch next The next decision point is the May 14-15 summit [The Economist](https://www.economist.com/by-invitation/2026/05/07/the-pact-that-could-help-america-and-china-repair-relations "economist.com"). If Trump and Xi jointly endorse BIT negotiations, the real work shifts to technocrats and lawyers. If they only agree to keep talking, the summit becomes a managed pause. Either way, the power remains with the side that can say yes to a process without conceding the principle — and that is why this pact matters for [Global Politics](https://modeldiplomat.com/discover/general "modeldiplomat.com") and for the next phase of U.S.-China competition. 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