Trump-Xi summit could hinge on these two crucial tech flashpoints

U.S. President Donald Trump's summit with Chinese counterpart Xi Jinping could hinge on two key tech flashpoints — critical minerals and market access for American companies.

The much-anticipated bilateral meeting between the two countries that were locked in a tariff standoff just a year ago began on Thursday, with warm words exchanged between the two leaders. The discussions will continue into Friday and are expected to cover geopolitics in Taiwan and Iran, as well as key trade topics.

But it's issues relating to U.S. and Chinese tech sectors that could be crucial points of discussion and contention, with a roster of key American executives including Nvidia's Jensen Huang, Tesla's Elon Musk and Apple's Tim Cook joining Trump on the plane.

"What is at stake is not just one trip or one headline but the direction of AI supply chains, the shape of future export controls, and the degree to which US chip leadership remains monetizable in China," Wedbush Securities' Dan Ives said in a note from Wednesday.

"The presence of Huang, Musk, Cook, and others signals that technology and commerce are among the top US priorities going into the meetings," he added.

Market access

Access to the world's second-largest economy for U.S. tech companies is a key focus for Trump, with the U.S. president commenting that opening up China for U.S. businesses would be his "first request" to Xi.

Beijing welcomed deeper commercial engagement from the U.S., Xi said on Thursday, and "China's door to opening up will only open wider."

The cordial atmosphere marks a sharp shift from relations just over a year ago, when China became the first major economy to retaliate against Trump's "Liberation Day" tariffs in April 2025.

Rules governing Nvidia's sale of advanced AI chips to China are a key issue. Shortly after Trump met Xi on Thursday, Reuters reported that Washington had cleared sales of Nvidia's H200 AI chips to several major Chinese technology firms, citing three people familiar with the matter.

"We believe Nvidia is still pressing the U.S. government to allow the company to sell into China," Brian Colello, senior equity analyst at Morningstar, told CNBC on Thursday. "We suspect that Nvidia would like to negotiate a solution where it can sell some gear into China, so that it is part of the Chinese AI stack."

But a licensing deal for Nvidia's H200 chips could be "politically explosive" and trigger a "fierce backlash from China hawks" in Congress, Heidi Crebo-Rediker, senior fellow at the Council on Foreign Relations, told CNBC.

"One possible outcome is not a clean reopening of the China market, but a conditional, closely managed channel for Nvidia sales, perhaps with safeguards, fees or limits," she added.

Other tech execs are likely eyeing market opportunities as well.

"The U.S. tech executives joining Trump make for an all-star list, and their collective objectives appear to be setting up a so-called Board of Trade and Board of Investment with China," Lauryn Williams, deputy director at think tank the Center for Strategic and International Studies, told CNBC, referring to a proposed body to manage trade relations between the countries.

Tesla will likely want full self-driving approval in China, Kyle Chan, a foreign policy fellow at the Brookings Institution, told CNBC. "Apple and Meta may want deals with supply chain partners in China for their consumer products."

Tesla, Apple and Meta have been approached for comment.

Apple and Tesla would benefit less from a "headline breakthrough than from a calmer operating environment," said Crebo-Rediker, because their China exposure runs through factories, consumers, regulators and competitors.

Critical minerals

Another area of potential contention is China's overwhelming control over the critical and rare-earth minerals markets. Beijing was responsible for 59% of the world's rare earths mining and 91% of its refining in 2024, according to the International Energy Agency.

"China's export controls on rare earths and magnets are a powerful source of leverage for Beijing," Chan said.

"Trump could ask Xi to grant general licenses for American commercial users to secure rare earth supplies," he added. "Even with an agreement over licenses, China's control over rare earths will likely remain a source of potential leverage."

China's chokehold on critical and rare earth minerals was a key factor in the country's retaliation against U.S. tariffs in 2025, with Beijing curbing some exports to the U.S, before a trade truce came into effect.

While the critical and rare earth mineral issue remains "acute" there could be a deal around the U.S. relaxing select export chip controls in return for progress in that area, Paul Triolo, a partner at U.S. advisory firm Albright Stonebridge Group, said. But, he added, the "political atmosphere" in the U.S. would make that difficult.

The "best-case outcome" would be an extension of the 2025 trade truce, which saw tariffs lowered between the countries, said Crebo-Rediker. Even under that truce, however, China's export controls on specific heavy rare earths and magnets were not fully reversed, she added.

"That puts the U.S. administration on the back foot," Crebo-Rediker told CNBC. "The U.S. and its allies cannot out-mine, out-process or outspend China quickly enough to rebuild resilience in the near term."