VIEW Analysts react to call between Trump and Xi over trade, TikTok

A recent phone call between U.S. President Trump and Chinese leader Xi Jinping reportedly eased bilateral tensions but yielded few concrete agreements, with the TikTok deal remaining unresolved and highlighting differing interpretations of progress. Experts suggest China is pursuing a long-term strategy to secure concessions on export controls and trade restrictions, while the U.S. seeks more substantive progress before a full bilateral summit. The call primarily served to establish a framework for future engagements, including an APEC sidelines meeting, rather than delivering immediate breakthroughs, indicating China's willingness to prolong negotiations to its advantage.

Analysis

The recent phone call between the U.S. and Chinese presidents has reduced immediate bilateral tensions but failed to produce substantive agreements, leaving the market in a state of strategic uncertainty. Expert analysis suggests China is leveraging a 'long game' negotiation strategy, feeling 'relatively unthreatened' and aiming to secure the removal of U.S. export controls, particularly on advanced semiconductors, before offering concrete concessions. This contrasts with the U.S. desire for tangible progress before committing to a full presidential summit in Beijing. The unresolved status of the TikTok deal epitomizes this divergence; while President Trump's readout indicated he believes a deal was approved, experts emphasize that China's core objective of retaining control over the app's algorithm remains a major, unaddressed obstacle. The agreement to meet on the sidelines of the APEC summit is viewed as a 'paltry outcome,' indicating that both nations are buying time to enhance self-sufficiency and gain economic breathing room, while underlying geopolitical and technological competition continues to build beneath a temporarily calm surface.

Key Decisions for Investors

• Investors with exposure to the semiconductor sector should anticipate continued volatility, as China has explicitly tied progress in trade talks to the lifting of U.S. export controls on advanced chips.
• The probability of a near-term, U.S.-favorable resolution for the TikTok deal appears low given China's firm stance on retaining algorithm control, warranting a re-evaluation of positions based on the deal's swift conclusion.
• It is prudent to differentiate between symbolic diplomatic gestures, which may create short-term rallies, and substantive policy changes, as experts suggest China may trade minor concessions for significant relief on tariffs and technology controls.
• Portfolios should be positioned for a protracted period of U.S.-China trade and technology friction, as the consensus indicates Beijing is in no rush to conclude a deal and benefits from prolonging negotiations to extract further concessions.