Hassett: Trump will have 'a wonderful conversation' this week with Xi

White House National Economic Council Director Kevin Hassett indicated that President Trump is expected to speak with Chinese President Xi Jinping this week regarding tariffs, despite ongoing legal challenges to the administration's tariff policy. Hassett expressed confidence that the courts will ultimately uphold the tariffs, while also noting that trade teams from both countries are in continuous discussions. He suggested a potential trade deal was expected last week but has been delayed due to focus on preventing supply disruptions.

Analysis

White House National Economic Council Director Kevin Hassett announced an anticipated discussion between President Trump and Chinese President Xi Jinping this week focused on tariffs, reflecting a "moderately positive" sentiment (score: 0.5) from the administration. Current U.S. tariffs on certain Chinese goods stand at 30%, a reduction from an initial 145% following a 90-day reprieve, with U.S. and Chinese trade teams, including U.S. Trade Representative Jamieson Greer, reportedly in daily contact. Despite this engagement, a potential trade agreement, previously expected as early as last week, has been delayed as the U.S. trade team, including negotiators Jamieson Greer and Howard Lutnick, has concentrated "100 percent like a laser beam" on preventing supply disruptions, partly due to licenses being processed "slower than we would like." The administration's tariff strategy faces ongoing legal challenges regarding the use of the International Emergency Economic Powers Act (IEPA); however, an appeals court recently reinstated tariffs after a lower court blocked them, and Hassett expressed strong confidence ("Plan A is all we're ever going to need") in their legal standing. Hassett also affirmed high confidence in the passage of a separate "big, beautiful bill," warning that its failure could trigger a recession. These developments carry a moderate potential market impact (score: 0.6).

Key Decisions for Investors

• Given the administration's optimistic tone but the acknowledged delay in a trade deal, investors should prioritize monitoring for concrete outcomes from the Trump-Xi talks over forward-looking statements.
• The ongoing legal battles concerning U.S. tariff authority, exemplified by the recent appeals court decision reinstating tariffs, underscore persistent policy uncertainty that could induce volatility in trade-sensitive sectors.
• Investors should scrutinize companies with significant exposure to U.S.-China supply chains, as the explicit focus on preventing disruptions and slower license processing indicates potential near-term operational headwinds.
• While Hassett projects confidence in the administration's tariff strategy and other legislative efforts, market participants should assess the tangible progress and potential economic consequences of these policies, rather than relying solely on optimistic projections.