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Soon: Trump And Xi Toast Each Other At State Banquet; Xi: Taiwan "Most Important" Issue In China-U.S. Relations. Aired 5:30-6a ET

Aired May 14, 2026 - 05:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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[05:31:40]

ANNOUNCER: This is CNN breaking news.

ERICA HILL, CNN ANCHOR: And we are, of course, following the breaking news out of China. Moments from now President Trump will head to a state banquet in Beijing with Chinese President Xi Jinping where the two will toast their important relationship.

Good morning from New York, everyone. I'm Erica Hill in for Audie Cornish. It's great to have you with us this hour.

We do begin with the historic summit between these two world leaders. Hours ago they exchanged views on the war with Iran. A White House official noting both sides agreed the Strait of Hormuz should remain open. The official also said they had a positive outcome on trade. For his part, Xi called Taiwan the most important issue in China-U.S. relations.

Here is some of President Trump's take on those initial talks.

(BEGIN VIDEO CLIP)

REPORTER: How were your talks, sir?

DONALD TRUMP, (R) PRESIDENT OF THE UNITED STATES: Great.

REPORTER: Did you talk about Taiwan --

TRUMP: Great. Great.

REPORTER -- Mr. President?

TRUMP: Incredible. China is beautiful.

(END VIDEO CLIP)

HILL: I want to bring in now CNN Beijing bureau chief Steven Jiang. Stephen, good to have you with us.

Not a lot from the president in those moments there, saying only China is beautiful, great. What more do we know about what was accomplished in those initial talks?

STEVEN JIANG, CNN BEIJING BUREAU CHIEF: Yeah. I think the main takeaway is everything has gone according to plan, at least from the outside. And it's notable that both leaders have largely stuck to the script. Perhaps not surprising for Xi Jinping but given Mr. Trump's reputation for making off the cuff remarks or giving impromptu interviews as you just saw, he actually made quite an exceptional kind of like behavioral change here in China.

But according to the Chinese though -- they have a readout -- they have talked about a lot of issues. Taiwan, as you mentioned -- as you mentioned, but also behind closed doors they talked -- they touched on all the hot button issues involving the Middle East -- obviously a reference to the Iran war -- but also Ukraine and North Korea.

We don't have a lot of details yet, but this summit has always been called high-stakes and low expectations because analysts think both sides are just trying to buy more time so they could address their strategic vulnerabilities.

For the U.S., it's about global supply chain risks like rare earths which, of course, essential to make weapons at a time when the U.S. is depleting its munitions and that rare earth supply chain dominated by China.

For Xi Jinping, it's all about tech self-reliance. He wants to free China from the U.S. chokehold on key technologies. So to -- of course, to ensure Chinese national and security -- Chinese national and economic security.

So from that very low bar they are expected clear. It seems they have accomplished that. But other than that it seems we just have to see how the next 24 -- 20 hours or so go -- Erica.

HILL: When -- as you mentioned, tech, of course -- it's impossible to ignore the sheer numbers when it comes to the dozens of tech CEOs with the president -- with President Trump there in China looking to make deals. In fact, the president referencing some of that in his opening statements. I want to play a little bit of that.

(BEGIN VIDEO CLIP)

TRUMP: We asked the top 30 in the world and every single one of them said yes. And I didn't want the second or the third in the company. I wanted only the top. And they're here today to pay respects to you and to China and they look forward to trade and doing business and it's going to be totally reciprocal on our behalf.

(END VIDEO CLIP)

[05:35:05]

HILL: Elon Musk said the meeting went wonderful.

We know trade is an important part, obviously, of this visit but it's remarkable to see this focus with all of those CEOs. And, of course, it raises questions too about where perhaps does the Secretary of State fit in in discussions like this?

JIANG: That's right. Trump obviously was highlighting the caliber of his CEO delegation. I think Xi Jinping was also keenly aware trade remains the top priority for Trump when it comes to his China policy. So in his remarks, Xi very much made a point of saying this relationship, in terms of the trade relationship, is mutually beneficial. It's all about win-win cooperation. Even telling the CEOs themselves that China is willing to open its doors wider and wider to welcome their products and investments. So that's, of course, all music to the ears of these CEOs in the room.

And Xi Jinping also mentioned that pre-summit trade negotiations that took place less than 24 hours ago went really well. As he put it, it produced some overall balance and a positive result. So it seems they do have some potentially some deliverables to announce in the next hours.

HILL: As we wait for those, hanging over all of this, of course, is the Iran war. As we noted, a White House official saying they -- you know, both sides agree they want to -- they want the Strait of Hormoz -- Hormuz, rather, to remain open.

How much though is this, in many ways, a bargaining chip for China at this point in terms of the support that the U.S. is looking for from China to pressure Tehran?

JIANG: That's right. Obviously, a lot of people have talked about how this war has strengthened China's hand because of its close relationship with Iran, not to mention of all the countries in the world they are also probably better shield from any impact short-term because of their stockpile. Because of their pivot to green energies.

And also, of course, you heard Trump himself saying before leaving the U.S. that he doesn't need China's help. But it's all but certain, as we have seen in the Chinese readout, he did ask Xi Jinping about this. And Xi Jinping may be just waiting for that in-person ask before he puts more pressure on Iran, one of China's closest partners in the Middle East. So he could also tout any potential positive result as a deliverable from the summit -- Erica.

HILL: Steven Jiang, appreciate it. We'll continue to check in with you, of course, throughout the morning as we monitor this moment.

President Trump, of course, making his way to the banquet. That banquet itself is set to start at the top of the hour.

Meantime, as we noted, President Xi offering a stern warning when it comes to Taiwan. How the island democracy is responding, next.

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[05:42:05]

HILL: As we wait for this state banquet in China to begin, which is being hosted, of course, in honor of President Trump's visit to Beijing, the (INAUDIBLE) is capping off a day of high-stakes talks with Chinese leader Xi Jinping who singled out Taiwan as the most important issue, reportedly telling Trump that if the situation in Taiwan is mishandled it would be a "highly dangerous situation."

Taiwan immediately firing back in a statement saying, "China's military threat is the sole source of insecurity in the Taiwan Strait and the broader Indo-Pacific region."

Joining me now from Taipei CNN senior international correspondent Will Ripley. A swift and very direct response there. How else is Taiwan viewing this moment, Will?

WILL RIPLEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hi, Erica.

Yeah. You know, I think part of the reason the response came so quickly is because Taipei was expecting that sort of rhetoric from Xi Jinping. This is the sort of kind of boilerplate Taiwan statement that he always makes whenever he sits down with the United States.

And the fact that Chinese state media -- the Xinhua news agency -- chose to release that quote as the very first statement from Xi that they reported about once the meeting began behind closed doors. That does indicate just how big of a deal this is for the Chinese.

But crucially for the Taiwanese it was not a surprise. This is not a change from what China has always said about cross strait relations and about the United States' role in it.

I want to read you a little bit more, first, of the quote from Xi Jinping, the Chinese leader, as reported by Chinese state media. He said, "Taiwan independence and cross strait peace are as irreconcilable as fire and water. Safeguarding peace and stability across the Taiwan Strait is the biggest common denominator between China and the U.S."

So then, very shortly after that, the Taiwan cabinet spokesperson Michelle Lee issued a statement. You read part of it a moment ago. I'm just going to read you the second half of that statement. It says, "Continuous enhancement of defense and effective joint deterrence are the most critical factors to ensuring regional security."

That is the ruling government trying to make it very clear that they need the United States' partnership, particularly the arms sales from the United States, to deter what they feel is the ever-present threat of potential military action by China. They're engaging military drills around the island on a near-daily basis. The number of planes varies but the messaging, and from the Taipei perspective, the intimidation certainly remains the same.

Leading up to this summit you had the Taiwan foreign minister saying that he hopes this summit brings, you know, surprises when it comes to the U.S. stance on helping to protect Taiwan's democracy by selling weapons, as it's required to do under the Taiwan Relations Act.

The deputy foreign minister, a few weeks ago, went even further, saying he was actually afraid that Taiwan could be on the menu with President Trump behind closed doors. So if all that results from this summit, Erica, is that statement from Xi Jinping, the here in Taipei they will be breathing a sigh of relief because they're basically hoping for as little mention of Taiwan as possible and no major changes from the fragile status quo.

[05:45:00]

HILL: Will, to your point, those concerns about, you know, Taipei potentially being on the menu, I know there's further CNN reporting about the concerns about, you know, Donald Trump being known as a transactional individual, whether perhaps some concessions could be offered up in those meetings with Xi Jinping.

Where does that stand? What is your sense in speaking with other analysts and other folks involved of where that potential actually stands this morning?

RIPLEY: Well, there was a lot of concern in the days leading up to President Trump's trip to Asia, particularly when he was speaking to reporters in Washington and he talked about the $14 billion Taiwan weapons sales package that Taiwan's Parliament has voted for but has not yet been approved in Washington. President Trump authorized $11 billion but there's a total of $25 billion in weapons sales, $14 billion still pending.

And the fact that President Trump said that he would discuss arms sales directly with Xi Jinping, that raised a lot of alarm bells here because that would be really unprecedented. If Xi Jinping were to somehow convince Donald Trump to either not approve that $14 billion arms package or to delay it, that would be seen as a major concession being given by President Trump to China. And it would also be a signal to Taiwan and even perhaps other U.S. allies that longstanding commitments are just up for negotiation under President Trump.

And keep in mind Taiwan does feel that they have a lot of cards to play here, Erica. America's huge investment in AI would not be possible without the advanced chips that are manufactured -- almost all of them made on this island of Taiwan. If there was any disruption to that supply chain that would be catastrophic for the global economy and particularly for the U.S.

So Taiwan is hopeful that point alone, never mind the democracy and all the other factors, will be enough for President Trump to at least defend the status quo and not rock the boat when it comes to Taiwan and give Xi Jinping any concessions despite what he may be asking for.

HILL: Will, I really appreciate the context, as always. Thank you.

Straight ahead here on CNN THIS MORNING, President Trump just leaving for that banquet dinner as part of his visit to China. The significance of this moment. We'll dig a little deeper ahead.

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[05:51:33] HILL: We are getting some of our first looks here. You see Stephen Miller there, of course, in China. So this is -- I believe this is the -- is this outside the banquet hall or inside the banquet hall? We're waiting -- I believe it's inside here -- for the state banquet in China in President Trump's honor, of course.

I believe that is the back of Secretary of State Marco Rubio's head right there as we see officials gathering. Defense Secretary Pete Hegseth right there as well. A number, of course, of administration officials have made this trip along with the president.

The first day of talks -- we're getting some initial readouts on. A very clear message from Taiwan -- from China on Taiwan.

What we're hearing from White House officials when we talk about this first day of talks and where things stand in terms of the readouts, both sides, we're told, according to a White House official, agree that the Strait of Hormuz needs to remain open to support the free flow of energy. The official though didn't say whether Xi actually agreed to expand China's involvement when it comes to bringing and end to that conflict. That's some of the things that people will be watching for.

As for this dinner itself, we're going to be walking you through some of the symbolism here. What that means in terms of the way that the president is being welcomed.

I mentioned you're seeing Defense Secretary Pete Hegseth there. The number of officials who are with the president on this trip. Also, dozens of tech CEOs. In fact, I believe I see Tim Cook walking in there in the background from April.

So as we continue to monitor those developments, I want to bring in now Adam Farrar. He's Bloomberg's senior geopolitical analyst and former intelligence officer -- for us to walk through a little bit of what we're seeing.

Adam, let's just start with, in fact, who came with President Trump and the significance of those who he chose to bring along with him, including these dozens of tech CEOs. That sends a clear message to China.

ADAM FARRAR, SENIOR GEOPOLITICAL ANALYST, BLOOMBERG, FORMER WHITE HOUSE SECURITY COUNCIL: So there's no doubt that the headline here for President Trump was trying to bring the most important people from his perspective in the world when it comes to business. And it demonstrates the strength of the U.S. economy and the power of U.S. companies when it comes to these key sectors.

But at the same point, I think it's important to keep I mind that the ambition here is likely more limited than President Trump lets on. You know, in his posts while transiting over, he talked about opening up China to U.S. business. But the reality is that the relationship and the direction of U.S. investment in China and growth in the relationship between these two companies in China is moving in the other direction. Certainly, some companies, like Apple, continue to produce a huge number of products in China. And Elon Musk and Tesla continue to try and build out their presence and compete actively in what is probably the most competitive EV market. But in general, the direction has been removing investments and looking for other opportunities. Even for Apple moving much of its -- or trying to move its iPhone production out to India.

And so for now, despite the kind of topline names that we're seeing there's not a lot of indication so far that we're actually going to see topline deals to go along with it outside of maybe a handful of purchase agreements potentially involving Boeing and agriculture.

HILL: To your point this is really about maintaining, right, rather than advancing necessarily some of these agreements.

It may be that many people have almost forgotten because so much has overtaken, frankly, in the headlines. Specifically, I'm talking about the war with Iran. But we still have a large tariff question that is looming when it comes to China.

[05:55:00]

Is there expected to be any real progress on that front?

FARRAR: So I'm glad you bring it up. Honestly, from our perspective it's one of the biggest questions here going through the summit and as a potential outcome is where will Chinese tariffs land?

As a reminder for folks, Chinese tariffs, at one point, reached over 140 percent last year in this massive escalation that eventually led to the conversation and de-escalation that led us to the president and President Xi's meeting in Busan last year and then, you know, this fragile truce that has somewhat stayed in place until now.

But the issue is that since the Supreme Court struck down the president's IEEPA authority, it -- you saw tariffs across the board produce significantly. And for China that was over a 10 percent reduction in its effective tariff rate. And the administration has made very clear that from their perspective, their new section 301 investigations are intended to actually put those tariffs back in place for all countries.

But China, for its part, has articulated a very different vision. It says that these tariffs are -- if they were to go in place would be considered new; not just returning to where they were. And that would require retaliation.

So with that in mind, the question here is will President Trump try and find an off-ramp -- maybe looking at increased cooperation on fentanyl or counternarcotics and choose to send out a message that maybe those tariff rates aren't going to rise as much or maybe not rise at all.

HILL: And how critical could that be to the president also potentially looking to China to help with the situation in Iran? FARRAR: So I think it could play a role. But overall, I think both sides have limited expectations on how much they're going to be able to move the other on the Iran issue. For China, they are -- you know, they obviously hold significant leverage in the U.S. relationship when it comes to trade and particularly this key question of critical mineral flows. But it's -- from our perspective, it's unlikely that China is going to use that, particularly focused on Iran, with the recognition that the broader bilateral relationship is more important to their economic security in the mid and long term.

And for the United States, you know, President Trump certainly keeps talking about -- and we saw Secretary Bessent also talking about needing Iran to take a bigger role. Push Tehran to back away from the strait. And we heard some comments to that effect earlier today.

But the reality is China is not interested in playing that role. It has a complicated relationship with Tehran and the Gulf. And while it will certainly push for de-escalation on both sides, it so far doesn't seem like they will be stepping in to really force Tehran's hand. And I think there are some real questions on whether they really even could given the regime and Tehran's perception of this war is existential.

HILL: What are you watching for in these moments? So first, let's start with this state banquet. In terms of messaging here what are you looking out for?

FARRAR: So I think overall we're not expecting many surprises. As we heard earlier this is about kind of, as you said, managing the relationship. And I think we will see, you know, through a state banquet and the arrival ceremony pomp and circumstance that really is meant to show the importance of this meeting to both countries but also to try and enhance that relationship from President Xi's perspective with President Trump and put him in a better position to potentially move towards China's key asks, whether that be on trade or Taiwan, which you mentioned earlier.

But overall, the meeting -- the banquet itself -- you know, we're just not expecting to see, you know, new policy statements or anything beyond this desire that we heard from President Xi earlier for stability in the relationship and the reality that from his perspective, or at least publicly, he will continue to push that competition and aggression between them will hurt them both.

HILL: Um-hum.

FARRAR: But that really won't change where we stand.

HILL: In terms of things that were perhaps not a surprise this strong language -- as I was just talking about that you noted with my colleague Will Ripley out of Taipei the language from China when it comes to Taiwan -- the very swift response from Taiwan. But the concerns do exist about whether -- you know, as one official noted just a couple of weeks ago, Taipei may be on the menu in some way in discussions between the U.S. and China.

What do you make of those concerns today based on this first day of talks?

FARRAR: So I don't think we have too much to go on right now in the sense that it was no surprise that President Xi put Taiwan at the top of his agenda. And more importantly that Xinhua and the apparatus in Beijing made that the key message and honestly, the first and only message we had for some time about the discussions today.

Xi sees Taiwan as a critical question for China's future and more importantly a key element of his legacy in cementing Taiwan back into China as, you know, they look towards the future both of China's economy but also the role of China in the world.