Climbing the summit

You know those meetings that could have just been an email? This isn’t one of them.

President Trump landed in Beijing today to kick off his two-day summit with Chinese President Xi Jinping. The last time Trump visited Xi was in 2017—when the Chinese economy was struggling, Xi thoroughly wooed his US counterpart, and Trump left with $253 billion in new trade deals. Today, China’s in a far stronger position than it once was, and the trade war with the US hasn’t slowed down China’s impressive export growth one bit.

The two geopolitical rivals are on opposing sides of plenty of issues, setting the stage for a dramatic discussion between the leaders of the two largest economies in the world.

A packed agenda

Here are the three T’s on the docket this week, and the stocks that could be caught in the crossfire:

• Trade: Both sides reached a ceasefire in their trade war last fall, but there’s still plenty of tension remaining. Several companies like Boeing have been made into political chesspieces, and managers there are desperately hoping that the peace won’t be broken. It would also be extremely beneficial to US farmers if China recommits to purchasing US agricultural exports in bulk.
• Tech: The US has kept heavy restrictions on Chinese purchases of advanced AI technology in place, and China certainly wants those sanctions to ease a bit. That would be a boon for chipmakers like Nvidia and AMD, which are not allowed to sell certain models to Chinese buyers but would love nothing more than access to China’s massive market. Meanwhile, if China pares back its restrictions on exporting rare-earth minerals, US mining stocks would suffer.
• Taiwan: Trump put US arms sales to the island nation on this week’s agenda, which is sure to stir up tensions. China is hoping that the US will withdraw its support for Taiwan, and China may sense an opening: The White House has yet to move forward with delivery of a massive $11 billion arms package promised in December.

Looming large in the background of this week’s discussions is Iran. The US is trying to prevent anyone from buying Iranian oil. China is Iran’s biggest oil buyer. See the issue?

China could use its influence in Tehran to help the US extricate itself from the Strait of Hormuz, but that would definitely mean concessions from the US, which analysts are unsure Trump would be agreeable to.

Bring the whole gang

Trump’s not travelling to Beijing alone—he’s accompanied by a posse of business leaders and luminaries who want to submit their own two cents to the discussions.

The headliners include Elon Musk, who will likely want permission to sell Tesla’s Full Self Driving product in China, which would be a massive boon for his company. Nvidia CEO Jensen Huang will also be joining the fun, along with Apple’s Tim Cook, Qualcomm CEO Cristiano Amon, and Micron Technology CEO Sanjay Mehrotra—all of whom have serious skin in the game when it comes to semiconductor sales and the future of the AI industry.

Suffice to say, this is one meeting nobody wants to miss.—MR