America’s sharply declining business transactions with China and Russia over the last two years do not suggest that the forthcoming trilateral summit in Shenzhen next month will be an occasion of friendly dealing feared by most Western (i.e., principally European) observers.

Washington’s recently agreed "constructive relationship of strategic stability" with China is far from a conflict-free cooperation advocated by Beijing. In fact, China believes that only cooperation can prevent conflict and confrontation with the U.S.

With regard to Russia, the U.S. national security strategy maintains a "flexible realism." Predictably, everything now revolves around the war in Ukraine. And only after the end of the war can Washington contemplate strategic stability with Russia.

Meanwhile, here are the economic and political problems that define American policy toward its two main strategic competitors.

In order to reduce growing policy frictions with the U.S., China cut its trade surplus 29 percent on its U.S. trades in 2025. That was followed by a 12 percent decline of its trade surplus with the U.S. in the first eight months of this year.

The U.S. has systemic problems with China and Russia

Apparently as a well calculated gesture, China kept its purchases of U.S. goods this year at the same level of last year – a radical change from earlier trade adjustments. For example, in 2025 China reduced its exports to the U.S. 30 percent, but it also cut its purchases in the U.S. 26 percent.

Trade data covering the first three quarters of this year show that China redirected its exports to other destinations, with its total foreign sales soaring 21.3 percent to $3.3 trillion. Exports, therefore, remain China’s key growth driver as trade surpluses account for nearly half of its GDP growth in the range of 4.5 to 5.0 percent.

So, the U.S. trade problems with China will continue. American exports to China are restricted on national security grounds, with China responding by limiting critically needed rare earth exports. For example, the U.S. Pharmacopeia reports that close to 1000 of American medications – such as antibiotics, heart and cancer drugs – need chemical inputs solely or primarily sourced from China.

And the latest trade spat concerns U.S. updates earlier this month to restrict and regulate American direct investments in China and Russia, along with North Korea, Cuba, Venezuela, etc.

The U.S. trade with Russia is negligible. Recent U.S. decisions to allow some Russian energy sales to bring down energy driven inflation are universally condemned as means of financing Russia’s war in Ukraine.

Russia is now a predominantly war economy. The IMF’s remote monitoring estimates this year’s GDP growth at 0.9 percent, significantly higher than Russian estimates of 0.0 to 0.6 percent. IMF’s Article IV consultations with Russia have been interrupted sine die on European interventions.

Managed stability is a slippery slope

The U.S. political and security issues with China and Russia are systemic and fundamental.

The self-governed island of Taiwan – which China considers its own province -- is the reddest of China’s red lines. The U.S., however, defends Taiwan’s status quo, maintains relations, sells arms and opposes China’s annexation by force. China seems to believe that the Taiwan question is the most likely case of military conflict with the U.S.

China also has a territorial claim over Senkaku/Diaoyu islands in East China Sea that are administered by Japan -- and are covered by Article 5 of the U.S.-Japan Treaty of Mutual Cooperation and Security.

China’s maritime borders are considered excessive territorial claims and have been challenged since 1979 by the U.S. Freedom of Navigation Operations (FONOPs). The U.S. is doing that in accordance with the United Nations Convention on the Law of the Sea (UNCLOS).

China and the U.S. also disagree about the Korean armistice of 1953. The U.S. wants an unconditional denuclearization of the Korean Peninsula whereas China (and Russia) want a gradual confidence building with lifting of sanctions on North Korea.

More recently, Beijing got alarmed with an allegedly U.S. approval of Japan’s rearmament of an archipelago hosting more than 100 American military bases operated by 55,000 of U.S. active-duty personnel.

The U.S.-Russia relations are much more difficult and complex. The two countries are parties to a NATO-Russia war in Ukraine. They are negotiating a peace deal and trying to build a new security architecture in Europe – all a tough legacy of Cold War years.

That is the background to the U.S.-China-Russia summit in Shenzhen, on the margins of the APEC (Asia-Pacific Economic Cooperation) summit scheduled for November 18-19, 2026.

There is no room here for bonhomie and friendly deals about the countries not around the table, but who will be on the menu.

President Donald Trump may also wish to talk about denuclearization. That’s a topic China would rather skip at this point. Likewise, Washington may not fancy Moscow’s rejoinder about considering French and British nuclear arsenals.

And the Shenzhen conference table may be turned upside down if Trump decides to, as he says, “finish the job” in Iran by “bombing to smithereens” after the elections on November 3, 2026.

Fortunately, APEC’s business will go on, with more Eurasian oil and gas to supplement Middle Eastern dwindling supplies. Emerging and developing Asia, with an expected 5 percent GDP growth, will remain the fastest growing segment of the world economy.