Global markets have been experiencing some renewed volatility with respect to the behaviours of the United States and Chinese Presidents Donald Trump and Xi Jinping, and their upcoming meeting with each other. This meeting is aimed at figuring out the economic issues the two countries have been experiencing. While the two leaders have been having economic issues concerning their countries, we as humans have been having issues navigating the consequences of Trump, Xi, and their countries.
Trump and Xi will meet in Beijing
As said in Yahoo Finance, Trump and Xi will meet in Beijing. This will be the first meeting to negotiate the lack of communication and negotiation due to the broken trade negotiations of 2020.
This meeting will focus on tariffs, the protection of intellectual property, and the resilience of supply chains between the 2 countries.
Things have gotten more complicated, as prior to the meeting with Xi, Trump began negotiations with Canada and then abruptly ceased.
Trump said Canada has been undermining U.S. interests and unfair practices. This has made Trump’s behavior harder to predict and has increasingly concerned people, given the upcoming meeting with China.
Global markets are reacting all over the globe
The Dow Jones Industrial Average fell 0.8% and then slightly rebounded. The S&P 500 and Nasdaq, however, had small increases.
- In Asia, the markets had mixed results, with the Shanghai Composite slightly increasing 0.3% and Hong Kong’s Hang Seng Index decreasing 1.1%.
- In Europe, particularly Germany’s DAX and France’s CAC 40, had declined to an extent that losses were led by these countries.
- The U.S. dollar increased in value, and the yuan decreased when comparing the U.S. dollar, euro, and yen.
The reduction of the yuan is due to the speculations of concessions from Beijing. The uncertainty resulted in an increase in gold and a reduction in oil below $85 per barrel.
Some say the summit might reshape the U.S.-China relationship
Some say that the summit might reshape the relationship, but that might not be the case. Sarah Liu, senior economist at Global Insight Partners, says:
“Markets are reacting to the possibility of progress, but the underlying tensions remain unsolved. The Trump Administration’s approach to trade continues to be inconsistent, and, like past summits, this one will not be an exception.”
The risks are significant for both parties. China’s economy is slowing, and its property sector is under immense pressure. The U.S. is in a politically charged environment with inflation projected for the midterm elections in 2025.
Skepticism is still present. Concerns about Trump’s commitment to multilateral negotiations arose after terminating talks with Canada just before the China summit. James Cartner, a trade policy expert at the Brookings Institution, stated:
“It’s a classic Trump move – create chaos, then offer a deal. But whether that deal is sustainable or beneficial in the long term is another question.”
The Future Trump-Xi summit is in the spotlight due to the impact it will have on supply chains
Tech and manufacturing companies in both countries will wait to see what the summit entails with respect to the costs and access to the market. Tariff changes and other deregulations will impact both countries.
Investor sentiment is cautiously waiting for the summit, with predictably volatile and declining confidence in the market. Sarah Liu also points out:
“Until we see concrete outcomes, markets will continue to swing on headlines. This is a wait-and-see moment for global finance.”
The Trump-Xi meeting’s date is approaching, with global attention focused on Beijing. The meeting is a future indicator of China-U.S. relations, global economic patterns, and trends. The world is prepared for changes, while the markets focus on the upcoming meeting between the two heads of state.