Trump-Xi Meeting Preview: Can an AI Deal and Tariff Relief Lift Global Markets?

Key Takeaways

• US President Donald Trump will host Chinese President Xi Jinping in Washington on September 24, with artificial intelligence, tariffs, rare earth supplies and the current trade truce expected to dominate the agenda.
• Washington has proposed an AI incident-notification mechanism, while the two countries have agreed to begin a broader dialogue on AI risks and national security.
• Limited tariff reductions and a trade-truce extension could support Chinese stocks, the yuan and multinational companies, but disputes over advanced chips, rare earths and Taiwan may prevent a comprehensive agreement.

US President Donald Trump and Chinese President Xi Jinping will meet in Washington on Thursday, September 24, in a summit that could influence global stocks, currencies and supply chains.

The Trump-Xi meeting preview has taken on additional importance after American and Chinese officials reached preliminary understandings on artificial intelligence and trade during weekend negotiations in New York. Investors will now watch whether the two leaders can turn those discussions into concrete commitments covering AI safety, tariffs and critical minerals.

Markets are not expecting a complete resolution of the strategic competition between the world’s two largest economies. However, an extension of the existing trade truce, targeted tariff relief or an AI communication mechanism could reduce uncertainty and provide a short-term boost to risk assets.

When Is the Trump-Xi Meeting?

Trump is scheduled to host Xi in Washington on September 24. The visit will be the first US-based meeting between the two leaders since 2017 and comes shortly before the current US-China trade truce is due to expire.

Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer met Chinese Vice Premier He Lifeng in New York ahead of the summit. The talks focused on trade implementation, market access, artificial intelligence and the movement of non-sensitive goods.

Greer said the US administration was seeking more balanced trade by monitoring China’s existing commitments and improving access for American farmers, manufacturers and workers, according to an official US Trade Representative statement.

The preparatory discussions produced enough progress to establish a framework for the leaders’ meeting, although the most sensitive technology and security disputes remain unresolved.

Could the US and China Reach an AI Agreement?

Artificial intelligence has emerged as one of the summit’s most closely watched subjects.

The United States has proposed a notification system under which Washington and Beijing could alert one another about major AI incidents with national-security implications. The mechanism could cover events such as an advanced model escaping containment, conducting unauthorized cyber operations or creating other cross-border risks.

The two governments have also agreed to begin a broader dialogue about AI opportunities and threats. Bessent said greater transparency was necessary because the US and China are the world’s two most influential AI powers.

The proposal remains preliminary. No binding AI agreement has been announced, and the notification system would not resolve disagreements over semiconductor export controls, access to computing infrastructure or alleged technology transfers.

Nevertheless, even a limited communication channel could be significant. It would establish a mechanism for managing AI-related incidents at a time when both countries are accelerating model development and expanding data-center capacity. Details of the proposal were reported by the Associated Press.

An agreement may reassure investors that AI competition will remain managed rather than escalating into broader restrictions affecting Nvidia, AMD, cloud-computing companies and Chinese technology groups.

However, Washington is unlikely to remove controls covering the most advanced AI chips. The Trump administration continues to view access to cutting-edge semiconductors as a national-security issue, while China is investing heavily in domestic alternatives from companies such as Huawei.

Tariff Relief Could Focus on Non-Sensitive Goods

Trade officials have established a bilateral “Board of Trade” designed to identify categories in which tariffs and other barriers could be reduced.

Initial discussions have reportedly focused on non-sensitive products, potentially including consumer goods, agricultural products, energy and medical equipment. These categories offer both governments an opportunity to announce economic progress without easing restrictions on strategically important technology.

For the United States, increased Chinese purchases of agricultural and energy products could provide a politically valuable outcome. American farmers and exporters have been among the sectors most exposed to previous rounds of tariff retaliation.

China, meanwhile, would benefit from lower duties on consumer and industrial products entering the US market. Targeted tariff relief could also support Chinese manufacturing activity and reduce pressure on exporters.

The talks should not be interpreted as preparation for a comprehensive free-trade agreement. Tariffs covering advanced semiconductors, electric vehicles, batteries and products associated with national security are likely to remain in place.

The more realistic objective is a limited package that stabilizes commercial relations and prevents another escalation.

Will the US-China Trade Truce Be Extended?

The existing trade and technology truce, agreed in South Korea in 2025, is approaching its November expiration date.

China reportedly wants a longer extension that could remain in place through the rest of Trump’s term. The United States favors a shorter extension, potentially six months, because Washington wants to preserve leverage over rare earth supplies and China’s implementation of previous commitments.

The disagreement does not necessarily mean the truce will collapse. Both governments have an economic incentive to avoid renewed tariffs and export restrictions, particularly while global growth is under pressure from elevated energy prices and high interest rates.

A compromise extension lasting between six months and one year may therefore be the most achievable outcome. It would postpone the most disruptive measures without resolving the underlying competition over technology and supply chains.

The negotiating positions were outlined by the Financial Times.

Rare Earth Supplies Remain a Major Sticking Point

Rare earth materials will be another critical component of the Trump-Xi meeting.

China occupies a dominant position in the processing of minerals used in electric vehicles, renewable-energy systems, electronics and defense equipment. Previous export restrictions disrupted manufacturers in the United States, Europe and Japan and demonstrated the vulnerability of global supply chains.

Washington is seeking more predictable Chinese exports, including supplies to Japan. Beijing could use access to rare earths as leverage in negotiations over semiconductor restrictions and US market access.

An agreement that improves licensing procedures or extends the suspension of additional export controls could support automakers, battery manufacturers, defense contractors and technology hardware companies.

However, a temporary arrangement would not remove the longer-term risk. The United States, European Union and Japan are already investing in alternative mining and processing capacity to reduce their dependence on China.

How Could the Trump-Xi Meeting Affect Global Markets?

Markets entered the week cautiously optimistic. US stock futures were little changed during early trading, while the 10-year Treasury yield remained close to 5%, limiting enthusiasm for risk assets.

The offshore yuan traded near 6.6943 per dollar, while the Australian dollar—often treated as a liquid proxy for Chinese growth expectations—held around $0.7125. Asian currencies could strengthen if the summit delivers tariff relief or a credible extension of the trade truce. The Wall Street Journal reported that investors were already positioning for possible improvement in bilateral relations.

The principal market scenarios are:

• Bullish outcome: The leaders extend the trade truce, announce tariff reductions on selected goods and establish a formal AI incident-notification mechanism. Chinese stocks, the yuan, the Australian dollar and globally exposed industrial companies could benefit.
• Neutral outcome: The summit produces broad commitments to continue negotiations but few immediate policy changes. Markets may initially welcome the absence of escalation, although gains could fade without measurable deliverables.
• Bearish outcome: Talks fail over rare earths, technology restrictions or Taiwan. Renewed tariff threats could strengthen the US dollar while pressuring Chinese assets, semiconductor shares and companies dependent on Asian supply chains.

Tariff relief could also have a modest disinflationary effect by reducing import costs. However, US bond yields are likely to remain driven primarily by Federal Reserve policy, energy prices and government borrowing rather than by a narrow trade agreement.

Semiconductor Stocks Face a Complicated Outcome

Semiconductor companies may experience the greatest volatility around the meeting.

A reduction in technology tensions could improve sentiment toward Nvidia, AMD and US semiconductor-equipment companies. Investors may interpret an AI dialogue as evidence that both governments want to prevent competition from developing into a complete technological separation.

Yet broad changes to chip policy appear unlikely. Washington remains concerned that advanced processors could strengthen China’s military and cyber capabilities. Beijing is simultaneously promoting domestic chips and computing systems to reduce its reliance on American suppliers.

The summit may therefore improve the tone of the relationship without materially reopening the Chinese market to the most advanced US chips.

Taiwan and Iran Could Limit Economic Progress

The meeting will not be confined to trade and AI. Taiwan remains the most sensitive issue in the bilateral relationship, while the conflict involving Iran has introduced new tensions around energy, sanctions and China’s commercial relationship with Tehran.

A serious disagreement over either subject could overshadow economic announcements. This is one reason markets should distinguish between diplomatic language and enforceable commercial commitments.

The most market-friendly result would be a focused agreement that separates achievable economic measures from harder geopolitical disputes. Failure to maintain that separation could leave the summit with few deliverables.

What Should Investors Watch?

The September 24 meeting is unlikely to produce a historic reset in US-China relations. Its immediate value lies in preventing deterioration and creating frameworks for continued negotiation.

Investors should watch for four specific outcomes: the length of any trade-truce extension, the products covered by tariff relief, the details of the proposed AI notification system and China’s commitments concerning rare earth exports.

Clear progress in those areas could support global equities and Asian currencies. A vague statement without timelines or enforcement mechanisms would provide less durable market relief.

The summit’s success will therefore depend less on ceremonial declarations than on whether Trump and Xi can convert preliminary agreements into practical measures that reduce costs, protect supply chains and limit the risk of another trade confrontation.