Low expectations set for Trump-Xi meeting as trade truce set to be extended

With both sides signalling modest ambitions, markets are unlikely to see a major trade breakthrough from this week's meeting, reducing the odds of a sharp risk on move tied to US-China relations specifically. The expected extension of the Busan trade truce, due to expire in November, removes a near term tail risk of renewed triple digit tariffs and disrupted rare earths access, both of which weighed heavily on bilateral trade last year. Any progress on the Board of Trade's proposed tariff carve outs for up to $30 billion in Chinese exports, spanning US agriculture, energy and medical products alongside Chinese consumer and low tech goods, would be incremental rather than transformative, but could offer modest relief to affected sectors. Currency and equity markets tied to critical minerals and advanced robotics may watch for any signs of friction over FCC import restrictions or US access to critical minerals, though analysts do not expect these issues to derail the broader truce this week. --- With both sides keeping ambitions modest, the Trump-Xi meeting itself, not any single deal, may be the real headline this week. Summary: The US and China have kept expectations low ahead of Xi Jinping's visit to Washington this week for his meeting with President Trump, with analysts suggesting the visit itself may be the primary outcome. Both sides are expected to extend last year's Busan trade truce, set to expire in November, though other deliverables are likely to be modest. US Trade Representative Jamieson Greer said the two countries are not seeking a "comprehensive" deal but aim to "manage" the relationship, potentially through announcements on agricultural trade and nontariff barriers. The "Board of Trade," announced during Trump's earlier Beijing visit, could see tariff carve outs on up to $30 billion of Chinese exports, covering US agriculture, energy and medical products alongside Chinese consumer and low tech goods. Treasury Secretary Scott Bessent said the two sid