Trump and Xi are likely to talk soon about trade, though no date has been set, Hassett says

National Economic Council Director Kevin Hassett indicated that a conversation between President Trump and President Xi regarding trade negotiations is expected this week, though a specific date is not yet set. This potential discussion follows accusations from President Trump that China is violating the preliminary trade agreement reached in Switzerland, with other administration officials also noting slow progress and stalled talks. While ongoing discussions at lower levels continue, a Trump-Xi conversation would represent a significant step amid escalating tensions and uncertainty surrounding the 90-day trade deal.

Analysis

Uncertainty continues to characterize US-China trade negotiations, despite National Economic Council Director Kevin Hassett's suggestion of a potential conversation between President Trump and President Xi Jinping this week. While no specific date has been set for this high-level discussion, it is anticipated by the administration and would follow the 90-day trade deal reached in Switzerland. However, this potential dialogue occurs amid escalating tensions, notably President Trump's accusation that China is violating the preliminary agreement, a sentiment echoed by other officials like Commerce Secretary Howard Lutnick, who described China as "slow-rolling the deal," and Treasury Secretary Scott Bessent, who noted talks were "a bit stalled." While lower-level discussions between U.S. Trade Representative Jamieson Greer's team and their Chinese counterparts are reportedly ongoing daily, the market impact score of 0.7 and mixed sentiment underscore the significance and precariousness of the situation. A direct conversation between the two leaders would indeed mark a major step, but the prevailing narrative from administration officials points to slow progress and a degree of frustration.

Key Decisions for Investors

• Investors should closely monitor any official announcements regarding a scheduled Trump-Xi call, as this could significantly influence market sentiment given the high market impact score.
• Given the mixed signals and accusations of stalled progress, consider maintaining a cautious stance on assets highly sensitive to US-China trade relations, particularly those implicated by themes of Trade Policy, Tariffs, and Geopolitics.
• Prepare for potential market volatility; a confirmed and constructive dialogue could offer a positive catalyst, whereas a failure to engage or further negative rhetoric could exacerbate downside risks.