By David Kirton and Nicoco Chan CHANGZHOU, China, Sept 22 (Reuters) - A US battery startup that scrapped plans to make Kentucky the site of its first factory has instead built it in China, exposing the limits of President Donald Trump's efforts to lure manufacturing home just as he welcomes Chinese President Xi Jinping for a summit.

Facing an American president constrained by war and politics, China’s leader may seek to lock in a tactical truce while he shores up a fragile economy at home.

Trump, facing low approval on the economy ahead of the midterm election, has an added incentive to emerge from the summit with China's Xi touting trade wins.

Trump has insisted that the U.S. is comfortably ahead of China, but his efforts last year to confront China with a mounting set of tariffs backfired. China holds a relative monopoly on the rare earths used in electronics and deployed that to help force a trade armistice with Trump.

US Treasury secretary Scott Bessent said the two sides had negotiated the creation of an AI dialogue mechanism, which was floated when Trump met Xi in Beijing in May, in talks with Chinese vice-premier He Lifeng in New York on Sunday.

Gatestone Institute senior fellow Gordon Chang breaks down the economic stakes of the upcoming Trump-Xi summit as U.S.-China trade relations face renewed tension. The panel discusses Nvidia CEO Jensen Huang's comments on competing with China and a potential artificial intelligence safety truce.

Beyond warm meetings between their leaders, the countries are engaging in tit-for-tat measures that call into question the stability of their arrangement.

FILE PHOTO: Politburo Standing Committee member Cai Qi walks past Chinese President Xi Jinping and Chinese Premier Li Qiang as they arrive for the closing session of the National People's Congress (NPC) at the Great Hall of the People in Beijing, China March 12, 2026. REUTERS/Tingshu Wang/File Photo

China bought more US soybeans just days ahead of a key leaders’ summit, a sign of further progress toward Beijing’s pledge to boost purchases of American farm goods.

China expelled two senior generals, Zhang Youxia and Liu Zhenli, over allegations of corruption and disloyalty. Their removal, approved by President Xi Jinping, reflects anti-corruption efforts within the PLA,