Key points
- Expect targeted deals, not a grand bargain. Agriculture and trade barriers look more likely to produce tangible announcements than a comprehensive US–China agreement.
- Rare earths and chips could matter more for markets than tariffs. Changes to export restrictions could have direct implications for industrial and semiconductor supply chains.
- Watch the details, not just the handshake. Boeing, soybeans, rare-earth stocks, semiconductors and China/Hong Kong equities could all see event-driven volatility.
Donald Trump is expected to host Xi Jinping in Washington on 24 September, although Beijing has yet to formally confirm the visit. A state dinner is also planned, with Nvidia CEO Jensen Huang, Apple’s Tim Cook and OpenAI CEO Sam Altman, among those expected to attend.
Investors should probably not expect a sweeping US–China deal. US Trade Representative Jamieson Greer has said Washington is looking to manage the relationship rather than negotiate a comprehensive trade agreement, although agriculture and non-tariff barriers could produce announcements. The two sides have also been exploring tariff reductions covering around $30 billion of goods.
That makes the details of the summit more important than the handshake itself.
1. Are tariffs actually coming down?
The US and China have been exploring potential tariff reductions covering around $30 billion of goods, but the scope and implementation remain uncertain.
For markets, a specific list of tariff cuts would carry more weight than another commitment to keep talking. It could reduce some of the policy uncertainty hanging over companies exposed to US–China trade.
2. Agriculture may deliver the easiest win
Agriculture is one area where US officials have explicitly signalled possible announcements.
China recently bought around 1 million tonnes of US soybeans, taking total purchases closer towards an annual commitment of 25 million tonnes through 2028. China still applies an additional 10% tariff on US goods, meaning tariff relief could encourage more private Chinese buyers to return.
Watch for: larger agricultural purchase commitments, tariff cuts and removal of non-tariff barriers.
3. Rare earths could matter more than tariffs
Critical minerals remain an important source of leverage in the relationship.
China’s dominance of processing means export restrictions can affect industries far beyond mining. Materials such as yttrium, for example, are used in aerospace, semiconductors and jet-engine coatings.
Any improvement in access to Chinese supplies could ease pressure on parts of the US industrial supply chain. But it could also reduce some of the geopolitical scarcity premium attached to companies developing alternative rare-earth supply.
4. Watch AI — But it remains hard to assume a chip breakthrough
AI is increasingly becoming its own diplomatic track. US and Chinese officials have been discussing risks including AI-enabled cyberattacks and autonomous military systems.
But investors should distinguish AI cooperation from semiconductor export relief.
Restrictions on advanced chips remain a much harder issue. Any change in the rules governing sales of AI chips or semiconductor equipment into China would likely have a more direct earnings impact than broader cooperation around AI safety.
5. Taiwan could be the biggest geopolitical wildcard
Xi is expected to raise Taiwan during the summit, while US allies are watching closely for any shift in Washington’s language. A proposed $14 billion US arms package for Taiwan also remains pending.
Even relatively subtle changes in rhetoric could matter for markets because Taiwan sits at the centre of the advanced semiconductor supply chain.
For investors, this means the statements released after the meeting may matter almost as much as any trade agreements announced during it.
Where could volatility show up?
1. Aerospace
Watch: Boeing, GE Aerospace
China committed to 200 Boeing aircraft following the Trump–Xi meeting in May. Investors may watch for confirmation, delivery details or an expansion of that commitment.
But Boeing CEO Kelly Ortberg has recently played down expectations of another large China order at next week’s summit, making the hurdle for a positive surprise more nuanced.
Watch for: new orders, confirmation of existing commitments and delivery timelines.
2. Soybeans and agriculture
Watch: ADM, Bunge
Agriculture may offer one of the clearest areas for a tangible agreement. China has already stepped up US soybean purchases ahead of Xi’s expected visit.
Soybean futures may therefore provide the most direct market reaction, while agricultural processors could also see volatility depending on the scale and structure of any commitments.
Watch for: purchase volumes, tariff reductions and whether private Chinese buyers return to US supplies.
3. Rare earths
Watch: MP Materials, USA Rare Earth and downstream manufacturers
This could be a two-sided trade.
Easier Chinese exports could benefit aerospace, semiconductor and energy companies by reducing supply risks. But they could also remove some of the scarcity premium supporting alternative US suppliers.
If restrictions tighten instead, the opposite dynamic could emerge.
Watch for: export licences, magnets, yttrium and other critical-mineral restrictions.
4. Semiconductors
Watch: Nvidia, AMD, Applied Materials, Lam Research, KLA, ASML, TSMC
Nvidia may be particularly headline-sensitive, with CEO Jensen Huang expected at the state dinner and AI competition high on the summit agenda.
But the key distinction remains: AI safety cooperation is not the same as chip-export relief.
The bigger market catalyst would be any change in restrictions governing advanced AI chips or semiconductor manufacturing equipment.
Watch for: export licences, specific chip models, equipment restrictions and any change in language around Taiwan.
5. China and Hong Kong equities
Watch: Hang Seng Tech, Alibaba, Tencent, JD.com
These names may act as the broader sentiment trade around the summit.
Concrete tariff relief or signs of a more stable relationship could reduce part of the geopolitical risk premium attached to Chinese assets. Constructive rhetoric without tangible policy changes may produce a less durable reaction.
Read the original analysis here
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