Trade, tech and power: US and China at a turning point in relations

United States and China enter a high-stakes summit this month reflecting a markedly different balance of power from 25 years ago, with economic and strategic competition now defining one of the world's most consequential bilateral relationships.

The shift is broadly characterised by China's rise as a leading force in global trade and manufacturing, while the United States retains advantages in military spending and select high-technology sectors. Both economies remain deeply interdependent, but increasingly structured around competition rather than convergence, sasy Al Jazeera.

Economics and trade

China has become the world's largest exporter, with goods exports reaching $3.59 trillion in 2024, compared with $1.9 trillion for the United States. As a result, 145 economies now conduct more trade with China than with the United States, underscoring Beijing's central role in global supply chains.

Trade tensions remain a defining feature of the relationship. The United States maintains a large trade deficit and has imposed an average effective tariff of 31.6% on Chinese imports. China has responded with countermeasures including a 10% blanket tariff on US goods and higher surcharges on specific products, including rates of up to 77% on beef imports.

Both countries also face significant debt burdens. US national debt exceeds $39 trillion, or roughly 115% of GDP. China's debt is estimated at about 94% of GDP, though some analysts argue official figures may understate the true level of liabilities.

Military and strategic resources

The United States remains the world's largest military spender, allocating about $954 billion annually. China's military budget is estimated at $313–$336 billion. While China fields a larger number of naval vessels, the United States retains qualitative advantages in aircraft carriers, submarines, and air power.

A key structural asymmetry lies in critical materials. China dominates global rare earth processing and holds more than half of known reserves, estimated at about 44 million tonnes. The United States holds less than 5% of China's reserves and remains dependent on Chinese supply chains for materials essential to electric vehicles, semiconductors, and advanced defence systems.

Energy and technology

China is now the world's largest energy consumer, followed by the United States. Both economies rely on fossil fuels for roughly 80% of total energy consumption, though investment trends diverge sharply. China is spending an estimated $290 billion on green energy, compared with $97 billion in the United States.

In artificial intelligence and semiconductors, the United States maintains a lead in private investment and model development, with about $109 billion invested in AI in 2024 and roughly twice as many notable AI models released as China. The United States also retains an ecosystem advantage in chip software platforms such as Nvidia's CUDA, though both countries remain dependent on Taiwan for advanced semiconductor manufacturing.

China, meanwhile, has established a leading position in electric vehicles, where EVs account for nearly 50% of new car sales in 2024, compared with about 10% in the United States.

Global influence and economic models

Both countries are members of major multilateral institutions including the UN Security Council and the World Trade Organization, but they operate through distinct alliance networks.

The United States is a leading member of NATO, the G7, and the AUKUS security partnership, reflecting its traditional alliance-based approach. China's influence is anchored in groupings such as BRICS and the Shanghai Cooperation Organisation, which have expanded in scope and membership in recent years.

Economically, China continues to follow a state-directed model emphasising infrastructure investment and long-term planning. The United States, under an "America First" approach, has prioritised tariffs, deregulation, and efforts to reshore manufacturing to reduce reliance on Chinese supply chains.

The summit comes against this backdrop of deepening structural competition, with both sides seeking to manage economic interdependence while asserting strategic priorities in an increasingly multipolar global system.