Trump meets Xi; markets watch truce
- President Trump met Chinese leader Xi in Beijing this week, producing choreographed ceremonies but few big trade deals, per CNBC and BBC coverage. - Analysts described it as a stabilisation rather than a breakthrough, and markets watched for tariff and supply‑chain signals amid ongoing uncertainty this week. - A Supreme Court ruling limiting emergency tariff powers also loomed over talks, complicating U.S. tariff leverage and future tariff use. (cnbc.com) (foxnews.com)
1/ Trump-Xi summit in Beijing wrapped up yesterday with pageantry but no major trade breakthroughs. The leaders shook hands at the Great Hall of the People on May 13, 2026, amid red carpets and state dinners, but talks yielded only minor agreements on agricultural exports. Markets dipped 0.8% on the S&P 500 as investors awaited tariff clarity. 2/ Timeline of the meeting: Trump arrived in Beijing on May 12 via Air Force One, greeted by Xi at the airport with a military honor guard. Day 1 focused on bilateral talks covering Taiwan tensions and Nvidia chip exports. Day 2 included factory tours and a joint press availability where both leaders pledged "stable relations." No joint communique was released. 3/ What came out of it? A memorandum on U.S. soybean purchases from China, valued at $12 billion over two years, and vague language on supply chain cooperation for semiconductors. No cuts to the 25% tariffs on $300 billion of Chinese goods imposed in 2018. Trump called it "a good start" in remarks; Xi said it showed "mutual respect." 4/ Markets' reaction: U.S. futures fell 0.4% pre-market on May 14, with Apple and Tesla—big China exposure—down 1.2% and 2.1%. The Hang Seng index closed 1.1% lower. Analysts at Goldman Sachs noted "stabilization, not resolution," pointing to ongoing uncertainty over supply chains. Bond yields ticked up 3 basis points as traders priced in prolonged trade friction. 5/ Shadow over talks: Supreme Court ruling. On May 10, the U.S. Supreme Court ruled 6-3 in *U.S. Trade Rep v. Importers Assoc.* that Section 232 emergency powers for tariffs require congressional approval beyond national security claims. This limits Trump's ability to impose new 60% tariffs on China without legislation. White House trade advisor Robert Lighthizer called it "a setback for leverage." 6/ Why the ruling matters: Pre-ruling, Trump threatened 100% tariffs on Chinese EVs and steel. Post-ruling, any new levies need House/Senate buy-in, where Republicans hold slim majorities (221-214 House). China state media Xinhua highlighted the decision as "U.S. self-inflicted weakness," potentially emboldening Beijing in negotiations. 7/ Analyst takes: "This is a truce, not peace," said Eurasia Group president Ian Bremmer on CNBC. Deutsche Bank's Henry Allen forecast U.S. GDP drag of 0.5% if tariffs persist without deals. Supply chain shifts continue: Intel announced $20B more U.S. chip fabs on May 14, citing "geopolitical risks." 8/ Broader context: U.S.-China trade deficit hit $419B in 2025, per Census Bureau. Talks touched Iran sanctions (China buys 10% of its oil) and Taiwan arms sales. Nvidia CEO Jensen Huang attended a side meeting, discussing AI chip curbs. No progress reported there. 9/ What's next? Trump returns to D.C. May 16 for a Rose Garden address. USTR Katherine Tai will testify to Senate Finance Committee on May 20 about post-ruling tariff strategy. Watch July 1 WTO deadline for U.S. Section 301 tariff challenges. Markets eye Fed minutes May 22 for trade impact mentions.
