Asia FI & FX Strategy Watch: USD/CNY - All eyes on Trump-Xi meet

Research evidence excerpt

Asia FI & FX Strategy Watch: USD/CNY - All eyes on Trump-Xi meet

Core issues potentially on the table

US President Trump’s meeting next week with Chinese President Xi Jinping in Beijing on

13th -15th May comes at a crucial juncture amid a fragile geopolitical and global

macroeconomic backdrop. They will primarily pursue stabilization of their strained

relationship and extension of the trade truce signed in October last year. The agenda will

potentially expand beyond trade and tariffs to include Iran war, Taiwan and tech supply

chains. Trump has also invited CEOs from Nvidia, Apple, Citigroup, Boeing and other

companies to accompany him on his China trip, as reported by Reuters.

Three key issues to watch out–

Iran War and geopolitics

The prolonged Iran conflict is expected to be a point of discussion as mentioned by US

Treasury Secretary Scott Bessent. The US appears keen on seeking China’s support in

using its leverage over Iran to reach an agreement but on US terms, particularly

regarding Iran’s nuclear program. China too prefers continuation of US-Iran negotiations

to end the war and reopen Strait of Hormuz as underscored by the Chinese Foreign

Minister Wang Yi post meeting with his Iran counterpart Abbas Araghchi this week.

Tariffs and ‘managed trade’

The constructive Paris talks on March 15 between the US and Chinese economic

officials led to the formation of Board of Trade to ‘manage trade’ by identifying

products to expand trade without jeopardizing each other’s national security and critical

supply chains. The proposals which include potential Chinese purchases of US

agricultural products (beef, soyabean and poultry), coal, oil and gas along with Boeing

aircrafts, will be subject to approvals from the presidents at the summit. Narrower