The extraordinary claim by U.S. Ambassador to China David Perdue—that Donald Trump asked Xi Jinping whether China would like to buy American weapons—would be remarkable even if it was merely a rhetorical exchange.
The important point is that the United States is not actually preparing to arm China. The State Department said U.S. law prohibits arms sales to China and that there is no offer or plan to do so. The White House likewise said there are no plans for such a sale. (The Guardian)
But the episode exposes something much larger about the modern developed world: military power has become simultaneously a security instrument, an industrial strategy and a diplomatic bargaining chip.
And that matters far beyond Washington, Beijing and Taipei.
The strange logic of selling weapons to your strategic competitor
At first glance, the reported exchange sounds absurd.
The United States regards China as its principal strategic competitor. China is rapidly expanding its military capabilities, particularly in the Indo-Pacific. Washington sells weapons to Taiwan partly because it wants to deter Beijing from using force against the island.
So why would an American president even jokingly ask Xi whether China wants American weapons?
Because modern great-power competition is not simply about who has more weapons.
It is increasingly about who controls the industrial ecosystem that produces them.
The United States remains by far the world's largest exporter of major weapons. SIPRI estimates that America accounted for 42% of global arms exports in 2021–25, up from 36% in the preceding five-year period. The United States supplied major weapons to 99 countries. (SIPRI)
That creates an unusual form of power.
Washington doesn't merely possess military hardware.
It has built a global ecosystem around American military technology—aircraft, missiles, air defence, naval systems, electronics, satellites, logistics, software and maintenance.
For many allies, buying American weapons also means becoming connected to American military infrastructure and, consequently, to Washington.
That is why arms exports are foreign policy.
The Taiwan contradiction
This is where the Trump-Xi episode becomes particularly revealing.
Taiwan is simultaneously a security issue, a semiconductor issue and a geopolitical issue.
The United States maintains an intentionally complicated relationship with Taiwan. Washington recognises Beijing diplomatically while maintaining unofficial relations with Taipei and providing Taiwan with defensive military equipment under the Taiwan Relations Act. (U.S. Department of State)
China considers Taiwan part of its territory and strongly opposes American arms sales to the island.
And yet Washington continues supplying Taiwan.
Reuters reported this weekend that Taiwan's government says it faces a severe military threat from China and that Washington understands its defence requirements. (Reuters)
The issue therefore isn't simply:
America sells weapons.
It is:
America uses access to weapons as part of the architecture of deterrence around one of the world's most strategically important territories.
That territory also sits at the centre of the global semiconductor supply chain.
Taiwan therefore represents an unusual intersection of military power, technology, manufacturing and economic security.
The developed world is rearming
The bigger story is that this isn't happening in isolation.
The developed world is entering a period of substantial military rearmament.
SIPRI estimates that global military expenditure reached $2.887 trillion in 2025, the highest level it has recorded. European military spending increased by 14%, while spending in Asia and Oceania increased by 8.1%. (SIPRI)
Europe is particularly significant.
European states' imports of major weapons increased by 210% between 2016–20 and 2021–25. Europe became the world's largest importing region for major arms for the first time since the 1960s. (SIPRI)
This tells us something important.
The post-Cold War assumption that economic integration would permanently reduce the importance of military power is weakening.
Europe is spending more.
Asia is spending more.
The United States remains the dominant supplier.
China is expanding domestic production.
Japan is increasing military expenditure.
And governments increasingly regard industrial capacity itself as a national-security asset.
China is different from most American weapons customers
There is another fascinating element here.
China is not behaving like a traditional weapons importer.
SIPRI says Chinese imports of major arms fell by 72% between 2016–20 and 2021–25, as China continued expanding its domestic design and production capabilities. (SIPRI)
That is crucial.
China has spent decades trying to reduce its dependence on foreign military technology.
So even if Washington were legally able to sell weapons to Beijing, the strategic question would not simply be whether China could afford them.
It would be whether Beijing wanted to increase its dependence on an American-controlled military supply chain.
That is unlikely to be attractive to a country whose broader strategy has been technological and industrial self-reliance.
And this is where the developed world has an enormous advantage over poorer countries
The most important lesson may actually have little to do with Trump.
Look at what the major powers have built.
The United States doesn't simply manufacture weapons.
It has:
advanced semiconductor companies;
aerospace giants;
satellite systems;
nuclear infrastructure;
artificial-intelligence laboratories;
universities;
defence contractors;
global financial institutions;
logistics networks;
software companies;
enormous domestic procurement budgets.
China has been constructing its own equivalent industrial ecosystem.
Europe is now trying to rebuild and expand its defence-industrial capacity.
That is what makes great powers difficult to challenge.
They don't merely buy power. They manufacture the institutions that produce power.
This is the part of the global system that developing countries frequently underestimate.
A country can purchase fighter jets.
It is much harder to develop the aerospace industry capable of designing the fighter.
You can import telecommunications equipment.
It is harder to build the semiconductor industry, research institutions and engineering workforce behind the equipment.
You can purchase surveillance systems.
It is considerably harder to develop the chips, sensors, software, satellites and AI infrastructure that make modern surveillance possible.
The real competition is therefore increasingly about industrial depth.
The American weapons industry also benefits from geopolitical instability
There is an uncomfortable economic dimension.
The United States' position as the world's dominant arms exporter means rising security concerns can generate enormous demand for American military equipment.
SIPRI says U.S. arms exports increased 27% between 2016–20 and 2021–25. American exports to Europe increased by 217% during that period. (SIPRI)
That doesn't mean the United States creates every conflict in order to sell weapons.
The evidence does not support such a simplistic conclusion.
But it does demonstrate that geopolitical instability has industrial consequences.
When governments become frightened, they spend.
When they spend, defence companies receive orders.
When countries buy American systems, they often become tied into American maintenance, ammunition, training and technological ecosystems.
Security therefore creates economic relationships that can last decades.
Europe's dilemma
This is particularly important for Europe.
European countries have dramatically increased defence spending, but much of the immediate demand is being met through foreign suppliers, particularly the United States.
That creates a paradox.
Europe wants greater strategic autonomy.
But rebuilding an independent European defence-industrial ecosystem requires enormous capital, production capacity, skilled labour and years of development.
Buying American systems is faster.
Building European alternatives creates greater industrial independence.
The two objectives can therefore pull in different directions.
This is one of the defining strategic questions facing Europe.
The same pattern is visible in Asia
Japan, South Korea, Australia, India and other Asian powers are navigating similar choices.
SIPRI says military spending in Asia and Oceania reached $681 billion in 2025, with China's expenditure estimated at $336 billion and Japan's at $62.2 billion. Taiwan's spending rose 14% to $18.2 billion. (SIPRI)
The result is an emerging security ecosystem in which countries are simultaneously:
buying weapons, developing domestic industries and attempting to avoid excessive dependence on another power.
That is very different from the old Cold War model.
And then there is Africa
This is where the story becomes particularly relevant to the developing world.
African countries remain overwhelmingly consumers rather than major producers of sophisticated military technology.
SIPRI estimates that African states' imports of major arms actually fell 41% between 2016–20 and 2021–25. (SIPRI)
But the deeper problem isn't simply how many weapons Africa imports.
It is where the technological value is created.
A country can spend billions buying aircraft, drones, armoured vehicles and surveillance systems without creating the industrial ecosystem necessary to reproduce them.
That leaves the country dependent on somebody else's technology.
And dependency in the 21st century isn't limited to weapons.
It can extend to:
chips → cloud infrastructure → satellites → AI → cybersecurity → telecommunications → payment systems → defence technology.
That is why the real lesson from the Trump-Xi episode is not simply about America and China.
It is about who owns the technologies on which modern states depend.
The developed world is moving toward strategic industrialism
For decades, globalisation encouraged countries to specialise.
One country manufactured electronics.
Another produced textiles.
Another assembled automobiles.
Another extracted minerals.
The assumption was that global trade would connect everybody.
But the pandemic, Russia's invasion of Ukraine, the U.S.-China technology rivalry and the semiconductor crisis changed the calculation.
Governments increasingly want domestic capacity in industries they consider strategically important.
Defence is one part of that.
Semiconductors are another.
Energy is another.
AI and telecommunications are increasingly joining the list.
The result is a world in which economic policy and national-security policy are becoming increasingly difficult to separate.
That may ultimately be the most significant story behind the Trump-Xi exchange.
Whether Trump actually intended the remark as a joke, bargaining tactic or casual observation remains unclear. Perdue's account has been followed by explicit denials from the U.S. government that any arms sale to China is planned. (The Guardian)
But the surrounding circumstances reveal something real.
The great powers are no longer thinking only about who has the biggest army.
They are thinking about who controls the factories.
Who controls the chips.
Who controls the software.
Who controls the supply chains.
Who can produce weapons without depending on somebody else.
And who can make the rest of the world dependent on them.
That is the deeper competition of the developed world—and perhaps the biggest strategic lesson for countries that remain primarily consumers of foreign technology.
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