US President Trump and Chinese President Xi Jinping are scheduled to hold a summit in September. However, as the date approaches, relations between the two countries are once again increasing in tension. Both sides have recently imposed sanctions over issues such as science and technology, artificial intelligence (AI), shipping, and human rights, leading to concerns that the meeting might be postponed. Taiwan media outlet Zhongshi News Network recently published an article introducing the recent developments between the US and China.

The United States recently successively imposed restrictive measures against China, including a ban on the import of new humanoid robots mainly produced in China, and sanctions on a Chinese shipping company suspected of transporting Iranian fuel. Additionally, it effectively banned exports to over 40 Chinese companies due to suspected human rights abuses. Furthermore, the US added two top-tier Chinese general universities to the Pentagon's blacklist and mentioned sanctions against Chinese AI companies.

The Chinese side immediately retaliated. The Ministry of Commerce stated that China "has no choice but to take necessary countermeasures," announced sanctions on 7 US companies, strengthened export restrictions on drones and related technologies to the US, conducted investigations into some office equipment using foreign software, and temporarily suspended the application of measures to expedite Chinese certification procedures for some manufactured goods previously carried out in the US.

While China warned of the possibility of "further countermeasures," it has so far shown relative restraint. Sun Chenghao, a senior researcher at Tsinghua University's Center for Strategic and Security Studies, pointed out that China has sufficient motivation to leave room for diplomatic negotiations before the summit and to prevent the US and China from falling into an uncontrollable cycle of retaliation, adding, "restraint should not be mistaken for acquiescence."

The AI sector is most likely to trigger new conflicts. China's AI industry has rapidly caught up with the US over the past 18 months, with many models already nearing parity with top products in Silicon Valley. Trump administration officials and large US AI companies accused Chinese firms of "extracting" capabilities from advanced US AI models using "distillation" technology.

"Distillation" refers to a method of efficiently training lighter AI models by having them learn data and response patterns generated by large, high-performance AI. In other words, the accusation is that Chinese companies have "piggybacked" on advanced US-made AI to improve the performance of their own AI.

The US government is even considering imposing sanctions on the grounds of intellectual property theft, but the Chinese government has denied the "distillation" method claimed by the US side.

George Chen, Hong Kong-based Head of Digital Business at consulting firm Asia Group, indicated that the US blocking Chinese AI models for national security reasons is tantamount to attempting to restrict China's AI from entering the global market, which is worth 1 trillion dollars (approximately 158 trillion yen), adding that "China will not stand by and watch this happen."

The Chinese government's most potent countermeasure remains the supply of processed rare earths abroad. Senior researcher Sun indicated that if the US government expands restrictions to major Chinese AI companies and other critical commercial sectors, the Chinese government may conclude that limited countermeasures are no longer sufficient to form a deterrent and could turn towards taking measures that "bring more significant economic consequences."

However, even if the US government crosses China's perceived "red line" before the summit, the Trump-Xi meeting is not necessarily cancelled. Senior researcher Sun pointed out that both the US and China view summit diplomacy "not as a reward resulting from the establishment of good relations, but as a crisis management mechanism." Therefore, he stated that it is more likely that the US-China summit will "narrow its agenda, focus on crisis management, and aim to avoid a renewed cycle of deterioration in US-China relations due to accumulated disputes."