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American President Donald Trump and Chinese leader Xi Jinping have now begun formal talks in Beijing in what is shaping up to be one of the most consequential United States (US)-China summits in years.

The meeting comes against the backdrop of the Iran war, rising tensions over Taiwan, worsening trade frictions, and a broader contest over technology, energy, and global influence.

At face value, the tone has been reassuring, even friendly. Xi warned against a slide into direct confrontation between the world’s two largest powers, invoking the idea of the “Thucydides trap”, the theory that rising powers and established powers often drift towards conflict as the balance between them shifts. Trump, meanwhile, praised Xi’s leadership and spoke optimistically about the future of US-China relations.

But behind the diplomatic theatre, are formal negotiations around three core issues.

The first is Iran. Washington wants Beijing to pressure Tehran into accepting terms around its nuclear programme and reopening the Strait of Hormuz. China remains one of Iran’s most important economic lifelines through its oil purchases, giving Xi leverage Trump currently lacks.

The second issue is trade. Both sides appear to be looking for a temporary stabilisation after months of tariff escalation, export controls, and supply-chain disruption. Trump arrived in Beijing alongside major US business leaders, while China has already moved to renew export licences for hundreds of American beef exporters in what appears to be an early goodwill gesture.

The third issue is Taiwan. Xi reportedly warned Trump directly that mishandling Taiwan could push the two countries into confrontation. Beijing is believed to be pushing for softer US positioning on arms sales and strategic backing for Taipei, while Washington remains wary of conceding too much ground.

But beneath all these issues lies a deeper struggle that The Common Sense has returned to repeatedly in reports and podcasts as the definitive battlefield between China and America of the next decade – the contest over the future of the US dollar.

For decades, dollar dominance has allowed Washington to finance enormous deficits, dominate global lending systems, impose sanctions, and project power far beyond its borders. China increasingly appears to believe that weakening the dollar’s role as the world’s reserve currency would reduce American global influence far more effectively than any military confrontation.

That battle is already well underway. The dollar’s share of global foreign exchange reserves has been gradually declining. The renminbi’s role in international trade settlements continues to expand. China is building alternative payment systems, increasing bilateral trade in local currencies, and encouraging more countries to reduce reliance on dollar-based finance.

In that sense, the Beijing talks are not really about trade or Iran or artificial intelligence or minerals. Behind formal subject matter, the gracious comments, and the reassuring notes against conflict, the talks are about the two steel-fisted global superpowers sizing each other up to better appreciate the trajectory of the ruthless rivalry that undoubtedly lies ahead.