The impact of the Xi-Trump meeting on the global economy

The meeting between the leaders of China and the United States has attracted much attention. U.S. President Trump has visited China twice in the past decade, this time accompanied by a group of American CEOs, including Elon Musk of Tesla, Tim Cook of Apple, Kelly Ortberg of Boeing, and Jensen Huang of NVIDIA. These companies need to maintain good relations with China.

Outside the camera, the substantive content of this meeting may be even more important. If this summit can achieve more lasting U.S.-China trade truce and reopen the Strait of Hormuz, it will bring a reduction in tail risks that have been absent from the global economy for the past year and a half.

On trade issues, the Busan Agreement signed between China and the U.S. in October 2025 halted most of Trump's punitive tariffs, and China also agreed to relax export controls on rare earths. This meeting extended these measures until 2027, with significant economic implications. China produces 85% of the world's rare earths and 90% of rare earth magnets, which are used in electric vehicles, wind turbines, F-35 fighters, and NVIDIA AI accelerators. Stable supply of rare earths can eliminate restrictions on some Western industries. Apple will have a more reliable supply of rare earth magnets, ensuring production for devices ranging from speakers to camera modules.

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