The United States government, led by Donald Trump, will host Xi Jinping, the leader of China, for the second time this year at the White House next week. This meeting takes place as both countries seek stability in their relations, with important issues such as trade, Taiwan, and Iran, as well as global concerns regarding artificial intelligence, on the agenda.
China's Economic Situation and Trump's Challenges
Xi Jinping travels to Washington amid expectations that China's economy will face a $1 trillion trade surplus for the second consecutive year. In contrast, Trump is facing domestic challenges, including the Iran war and public dissatisfaction with rising prices, and is seeking trade achievements to garner support from American voters.
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Key Issues of the Meeting
Markets are looking for signs of an extension of the tariff ceasefire announced after the Trump-Xi meeting in South Korea last October, which is set to expire on November 10. This agreement had halted the trade war in which the two largest economies in the world attacked each other with tariffs exceeding 100 percent.
The U.S. Trade Representative, Jamie Sun Greer, announced this month that the two countries are planning announcements regarding agriculture and non-tariff barriers. Traders hope for progress in reducing reciprocal tariffs, which involve $30 billion worth of goods. China may take steps to reduce import tariffs on U.S. agricultural products.
The U.S. government has consistently pressured China for non-compliance with last year's agreement, while Beijing is calling for further tariff reductions. Trump is looking to announce trade victories before the midterm congressional elections in November and is also seeking to solidify large purchases from Boeing and agricultural products.
Trade and Technology Agreements
Reports indicate that Xi Jinping is preparing a large trade delegation to accompany him, similar to 2015 when China signed a $38 billion agreement for 300 Boeing aircraft. After the May meeting, China announced it would purchase 200 more aircraft, and Boeing described this only as a "starting point" for a larger deal.
China is negotiating with Boeing for a deal that includes 500 737 Max aircraft and dozens of wide-body planes. This deal has been stalled for years, and Trump has threatened to cut off China's access to essential spare parts.
Beijing is also seeking delays in legislation that prevents thousands of Chinese companies from obtaining advanced U.S. technology. Meanwhile, Washington is calling for the facilitation of the shipment of rare minerals and essential minerals from China, which are used in high-tech production, including automotive and aerospace.
