Trump-Xi meeting just about covers the dots, but was it really “amazing”? | investingLive

If we know Trump – and we all do – then him saying that the meeting was “amazing” and that it was a “12 out of 10” is rather unsurprising. We’ve been used to him boasting about his “successes” and “victories”, often times overselling the positive narrative. That especially when it comes to China, as has been the case in the past.

So, what can we make of the latest exchange between the two sides after the first face-to-face meeting between Trump and Xi since 2019? Here’s a quick rundown:

• The latest agreement will be for one year, and is expected to be renewed after that period
• China tariffs to be reduced by 10%, dropping from 57% previously to 47%
• The 10% reduction comes as fentanyl tariffs are reduced, with China vowing to do more on the issue
• Trump’s tariffs threat slated for 1 November is now scrapped
• China is to keep rare earth exports flowing, “no more roadblocks”
• Some agreement on trade whereby China will start purchasing soybeans “immediately”
• Some discussion on semiconductor chips, centering around China purchases but nothing concrete
• Nothing of note was discussed on Nvidia’s Blackwell chips, which was the focus before the meeting
• Taiwan issue was not brought up for discussion
• Ukraine issue was discussed but nothing specific on more sensitive topics like China buying Russian oil
• Trump to follow up with a visit to China in April next year
• Xi to then come visit the US some time after that

All in all, it seems that the meeting went “well”. Or at least as well as one would hope for it to be.

It definitely looked like Trump did not want to push Xi’s buttons on more sensitive matters to avoid a bust up. And it worked.

As for Xi, his running threats on rare earth export controls and stopping soybean purchases just before the meeting this week also worked in his favour in gaining more leverage.

I would classify it as a win-win to some extent in terms of both sides managing to keep things cordial and carry on the relationship. That being said, what does this deal really do?

If you really read into it, all this does is just revert back to the status quo that we’ve been swimming in for the last four to five months. China’s tariffs are at least reduced slightly but other than that, nothing really changes with this agreement.

Beijing used the threat of rare earth export controls to manage the narrative this week and by allowing for things to stay as they were before October, it keeps Trump on a leash as to how far he can push things against China.

Meanwhile, soybean purchases will be soybean purchases. We’ve been down this road one too many a time and we all know that when China says that they will be buying, it doesn’t really mean that. All it means is that they will step up US imports in the next two to three months maybe and perhaps look to cover a potential supply gap between February and April next year (seasonality suggests that Brazil’s new crops might not yet be able to hit the market by then). But after that, expect China to keep things in check and not overly give in to the US on this front. They’ve been doing so since 2018.

Besides that, the only other noteworthy thing was on Nvidia’s Blackwell chips. Trump suggested there were talks on chips but nothing related to Blackwell, thus closing the door on that front for Nvidia. CEO Jensen Huang said that China’s position is very clear at the moment in that “they don’t want Nvidia to be there right now”. So, that’s a bit of a bummer as Trump and Xi don’t seem to have made much progress on that front.

All that being said, I guess the biggest takeaway at least is that the US and China will continue to pretend to play nice for the rest of the world to see. That at least until we get to the turn of the year to start with. There’s no further escalation in the trade conflict and other matters of tension, with Beijing’s goal still being to hope to ride out Trump’s four-year term. Well, they’re at least already a quarter to the way there.