Trump has made decoupling from China one cornerstone of his economic agenda. But he also wants a surge in Chinese investment to power America's manufacturing sector forward.

The big picture: That is a central, unresolved tension between the world's two largest economies as this much-anticipated summit gets underway.

• Trump has dangled the prospect that Chinese investment could help revive U.S. manufacturing, even as he embraces a protectionist agenda.
• The president seeks less economic dependence on China — while bringing a group of leading CEOs to the summit to talk, one assumes, about business opportunities between the two nations.

What they're saying: "Trump has sporadically suggested that he would like China to invest in the U.S., specifically for Chinese companies to build manufacturing facilities for automobiles and other products here," Wall Street research firm Fundstrat wrote in a note this week.

• "There's a reason they say to keep your friends close, and your enemies closer. Chinese companies building manufacturing in the U.S. eliminates much of the supply chain vulnerability that has vexed sovereign-security experts in recent years."

Zoom out: The desire to cut U.S. dependence on China escalated in Trump's first term and continued under President Biden, hardened by pandemic-era supply chain failures and sharpening national security concerns.

• The shift away from Chinese imports in recent months is stark: Imports from China, adjusted for inflation, dropped almost 30% in 2025 alone — a result of high tariffs, the future of which could shift after the Trump-Xi meeting.
• For example, about 60% of cargo at the Port of Long Beach — among the nation's busiest — comes from China, down 10 percentage points from 2019, even as business with Southeast Asia nations like Vietnam, Malaysia and Thailand continues to grow.
• "This shift reflects a broader realignment in global trade patterns," port CEO Noel Hacegaba tells Axios.

Yes, but: Still, the Chinese trade surplus topped $1 trillion last year, a record for any economy.

• Washington is trying to build up a credible alternative supply chain for rare earths controlled by China and necessary to power the AI boom, but that could take years.

The intrigue: Business leaders and lawmakers are closely watching whether Trump returns from Beijing with a splashy Chinese investment commitment — an agreement that would go further than purchases of the expected "three Bs": Boeings, beef, beans.

Friction point: Ahead of the Trump-Xi summit, House Democrats and Republicans separately warned the White House against any commitment that would give China a larger manufacturing foothold in the U.S.

The other side: A senior White House official said a major Chinese investment initiative has not been on the negotiating table.

• Talks will instead focus on purchase commitments in agriculture and aerospace, with U.S.-China working groups — the Board of Trade and Board of Investment — implementing any commitments, the official said.

What to watch: "If the president puts out that positive Truth Social post, or they have some announcements related to the Board of Trade, that should be considered as successful as these other bilateral relationships where you've seen really eye-popping investments," Allison Smith, a former U.S. trade negotiator, tells Axios.

Go deeper

America's inflation problem is getting worse, not better, as 2026 progresses. New wholesale price data — on the heels of a consumer price report yesterday — confirm it.

Why it matters: The evidence of continued price pressures stretches far beyond the energy price spike that occurred following the Iran war, and suggests ongoing pressures across a range of goods and services.

• It is getting harder and harder to chalk up the inflationary impulse evident in a wide range of data solely to the one-time effects of tariffs and the blockade of the Strait of Hormuz.
• That makes the chance of a Fed interest rate cut at any point this year increasingly remote, barring a stark turnabout in the inflation trend or labor market conditions.

By the numbers: The Producer Price Index for final demand rose 1.4% in April alone, and is up 6% over the last 12 months.

• Even excluding volatile food, energy and trade services, the index was up a whopping 4.4% over the last year, the highest 12-month increase since 2023.
• Prices for services were up significantly, thanks to a 5% rise in transportation and warehousing prices — a sign that higher fuel prices are already having second-order effects on what it costs for other goods.

What they're saying: "Today's report suggests that while the move higher in prices received by producers is primarily being driven by energy, we are also seeing a broader increase across other core components of the inflation basket," analyst Richard de Chazal of William Blair wrote in a note.

State of play: As Warsh prepares to take charge of the Fed, the economic environment is simply not cooperating with Trump's desire for further interest rate cuts.

• Many of Warsh's soon-to-be colleagues are warning that the next policy move could be a rate increase.
• "I believe it will likely be important to maintain the current slightly restrictive monetary policy stance for some time," Boston Fed president Susan Collins said this morning at the Economic Club of Boston.
• "More than five years of above-target inflation has reduced my patience for 'looking through' another supply shock," she added. "And while it is not my most likely outlook, I could envision a scenario in which some policy tightening is needed to ensure that inflation returns durably to 2% in a timely manner."

Of note: The CME FedWatch tool, based on futures prices, now implies 34% odds that the Fed's target rate will end this year higher than it is now, versus 16% odds a week ago.

The bottom line: "For a new Fed chair who is keen to lower rates, this data represents a growing obstacle to that goal," de Chazal wrote.